Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Rex Dwyer who wrote (3078)	5/23/1998 6:24:00 AM
From: Jerome Wittamer	Read Replies (1) \| Respond to of 60323

Hi Rex, I do subscribe to your analysis under messages 3076 to 3080. Indeed, AOL and Kodak are doing the marketing and, Chris, Kodak Digital Science Memory cards are SanDisk's!!! Regarding your profit concerns I would tend to agree with you, at least for the next 2 to 3 quarters, after that, their cost reduction programs should start paying off, with their Taiwanese foundry running. Remember how H&Q said this investment was valuable. Currently they have many constraints as regards the matching of wafer orders with OEMs-end user demand. This would not disappear with the UMC but would certainly give them more flexibility together with more room for price cuts, i.e. by insuring fat margins. Take also into account that flash component prices are falling. An additional positive, still in the same context. This year shows the emergence of the MMC as a new storage device for applications requiring very small size components. The company itself acknowledged that MMC would be a competitor of CF. It is thus not a 100% win-win situation. Currently there are no outside competitors in this market. Of course SanDisk has already licensed the technology to other manufacturers as it would not be able to meet demand all alone. To state it correctly there is no competing technology on the market at this point in time. Be sure that other companies out there are trying to do the same and better. This year and next year are also special in that we are witnessing a larger consumer acceptance for digital products such as HPCs, digital cameras, musicplayers, voice recorders, GPS, AutoPCs. Hundreds of other applications using flash memory are discovered every quarter. SanDisk has a lead in that it provides one memory card which can be used accross all of these platforms, i.e. you can take a picture with your D-cam, switch the card from the D-cam to the HPC, send the picture by e-mail to a friend and insert the card into the printer, print the picture. Then download a song from the Net and play it on your MPlayer. These platforms are only emerging and it will take a few years before their use is pervasive. Some of these not yet invented applications will require even more sophisticated memory (smaller with more capacity and at a very low price) and SanDisk is working on this to bring the necessary solutions. This can not be done without the adequate personel. As stated in the 10Q, such individuals are the most important asset of the company and they do everything they can to retain them and to attract others. As a result of these factors one should conclude that 1998 and certainly 1999 are critical to the company's success. They involve a lot of risks and uncertainties. The company could fail and record higher revenues while not making profits and fail to issue new products. It could as well do the opposite. Jerome