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

To: limtex who wrote (3152)	6/2/1998 3:35:00 PM
From: Ausdauer	Read Replies (2) \| Respond to of 60323

Regarding Viking Components... That message indicates that the royalty payment is paid by the chip supplier, not Viking components. That may be any one of the known factories paying royalties to SanDisk. Thus, the royalty payment is incorporated into the raw chip price. Viking then tailors the chip to their own specifications. That is not necessarily a bad thing for SNDK as long as they get the royalty somewhere along the line. My fear is that a competitor like Lexar could supply "resellers" (not sure that is the proper terminology) with blank chips that then receive a private label. Simple Technology has that type of arrangement. If the litigation against Lexar is settled unfavorably (from SNDK's perspective) the stream of royalties could be interrupted. If the case is settled favorably, Lexar could be responsible for past and future royalty payments including those chips sold to "resellers". I don't know if there is an additional penalty for inadvertent or unintentional patent infringement. I don't believe this information has any bearing on the current stock price which has me completely baffled.