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Technology Stocks : WDC/Sandisk Corporation -- Ignore unavailable to you. Want to Upgrade?

To: Michael C. Woodward who wrote (2015)	12/9/1997 3:54:00 PM
From: Mike Winn	Respond to of 60323

Another research paper. Michael, could you please ask Dr Harari about the competition from Hitachi. I understand that Hitachi makes CF but they use AND technology and not NAND technology like Sandisk. So Hitachi may only have to pay royalty for the ATA and CF trademark, but not for other technologies. Also please check with him where Sandisk stand vs Toshiba, Intel, Sony in the flash standard. ======================== Company Story for SNDK - 12/5/97 SanDisk Corporation o Reports 83% market share of chips used as film in digital cameras o Leads industry with innovative chip that doubles memory capacity SanDisk Corporation is a ranked contender for the title of industry leader in the field of flash memory technology, although the company has climbed into the ring with some hi-tech heavyweights. To date, SanDisk has held its ground against the industry heavyweights, and has even landed a few blows in the fight for supremacy in the flash memory field. Flash memory data storage products are to small electronic devices what the floppy disk has been to the PC, an insertible device used for additional data storage, which does not loose memory when removed from its power source. However, the flash memory products are far smaller and hold a lot more data. SanDisk's flash memory data storage products fall into two major categories. The FlashDisk cards are used as extra data storage for the new hand-held computers, known as personal digital assistants (PDAs) or personal PCs. The CompactFlash cards are matchbook-sized devices that have a wide application in consumer electronics products, most notably the new digital cameras that use the CompactFlash cards as film. SanDisk's products have received wide acceptance among consumer electronics manufacturers. At least 14 major camera manufacturers have announced that they are either currently using, or will be using, SanDisk CompactFlash cards as film in their digital cameras. SanDisk estimates that it enjoys an 83% market share in terms of units shipped for its CompactFlash cards, and at least 90% of all digital cameras use SanDisk's CompactFlash cards. SanDisk is in direct competition with Hitachi in the production of compatible CompactFlash cards. Toshiba and Intel make similar products, which are designed to different standards, and, therefore, are not interchangeable with SanDisk's CompactFlash cards. Additionally, Sony has just announced that it has developed its own standard for flash memory devices. SanDisk views this competition as essential to the overall growth of the market for flash memory products. Manufacturers of consumer electronics devices might be hesitant to design the flash memory cards into their products if the cards are only available from one source. SanDisk believes that having multiple sources of flash memory products will only help to expand the existing market. SanDisk has been able to maintain its prominence in the flash memory field by optimizing its portfolio of flash memory patents, and by remaining on the leading edge of this technology. The company currently has cross-licensing patent agreements with Hitachi, Toshiba, Samsung, Intel, and Sharp. These cross-licensing agreements bring in a steady flow of royalties to SanDisk (13% of total revenues in the 1997 second quarter), which SanDisk uses to increase its own funding for R&D and market segment development. Without doubt, SanDisk has been a leader in the development of double density flash (D2 flash), a radical advance used to make flash memory chips which can hold twice as much information while using very little additional silicon. In six to nine months, SanDisk will be producing these chips, and hopes to ramp up to high production in 1998. Intel has recently announced the development of a similar double density chip. SanDisk can only see the market for flash memory growing. For example, someday cellular telephones will have the ability to receive voice mail, faxes and e-mail, but will need tiny data storage devices to hold additional memory. SanDisk sees its flash memory products as the solution. While SanDisk may not emerge as the heavyweight champion of the flash memory technology field, it should continue to capture a significant share of this rapidly expanding market.