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: Bill Zeman who wrote (5475)	4/17/1999 12:53:00 PM
From: Ausdauer	Read Replies (1) \| Respond to of 60323

Bill, I would be arguing in ignorance if I said knew exactly what the Lexar suit is about. To some extent these things are shrouded in secrecy. I believe it has to do with the card assembly. That is, Lexar probably collects components for the CF card and pays some flash chipset manufacturer for the silicon. They then design various features into the card which may be unique depending to the controller they use, firmware, and other hard or soft configurations within the card. They obviously have a viable solution for write speed, for example. In the end they have a CF card with its basic features and any additional "proprietary" nuances that the manufacturer may include. Having said that, they must use some key SNDK patent in the fabrication. This may be the unique product itself: a CompactFlash card or some other key integrating feature. One example may be the autodetection mechanism for weak cells that eliminates them from further write cycles. I don't have the technical or legal expertise to know this for certain. I e-mailed one of the smaller card manufacturers about 10 months ago and they said they do in-house fabrication using chipsets from SNDK competitors. They said they do this "because it is the only way to insure product quality." They also said that they pay extra for the chipsets because these are the key ingredients and there is, in effect, royalty payments included in the price of the chips. (I believe they were referring to the royalties paid by Hitachi or Samsung to SNDK.) They suggested that they were not subject to additional royalty fees for this reason. I consider Lexar a test case. A precedent will be set here. Recall that they are a formidable opponent. They have made technological advances that rival SNDK's. They have aggressively gone after market share. If they fall, I believe the others will be much easier to go after. Also, I have mentioned before that SSTI has recognized the SNDK I.P. and is prepared to pay for the technology in the form of a cross-licensing arrangement. This indicates to me that there is a mutual respect between SNDK and SSTI. If SSTI continues to struggle, maybe SNDK will elect to acquire them and their in-house talent. That is just a guess. I believe the issue at hand are the so-called "card level" or "card assembly" patents. Ausdauer