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To: Ausdauer who wrote (3518)	7/15/1998 7:04:00 PM
From: limtex	Read Replies (1) \| Respond to of 60323

Aus Talk about missed the boat. SNDK is like turning up in Manhattan today and trying to get on the Queen Mary. They have just missed out on all the revenues going for this new product. Hitachi Lexar and the other one whoose name I've forgotten are cooking the SNDK goose. Maybe MMC Regards, L

To: Ausdauer who wrote (3518)	7/15/1998 9:31:00 PM
From: Yakov Lurye	Read Replies (1) \| Respond to of 60323

Aus, In general, I agree with your assessment - licensing revenues differentiate SNDK from other flash manufacturers. A word of caution though - we do not have enough information to project the revenue streams forward. Many licensing agreements in this industry are structured in such way that per-unit payments decrease year-to-year or with shipment volumes. Positive resolution of Lexar litigation could give the stock a big boost, but I think that value of SNDK patents is to a degree built into the current price. Production numbers do not look too good at the moment. Competition is clearly increasing as witnessed by the 17% quarterly decrease in ASPs (also note that MU had acquired a flash memory company - they are trying to diversify out of DRAM). Considering that SNDK's production GM was 18% (actually 12%, I added 6% attributable to inventory writedowns), another Q like this and SNDK will be selling their products almost at cost. IMO, statements about 32->64 transition and good yields at Taiwan plant are crucial for evaluating SNDK's prospects. I suspect that analysts and fund managers will remain on the sidelines for a while. Of course, a lot will depend on CC and on the direction of semiconductor sector in general. Still long SNDK but not inclined to increase my position for now Good luck, Y.