Seeking Alpha

This weekend's Barron's (sub. req.) takes a closer look at Intel's (ticker: INTC) new joint program with Micron (ticker: MU) to produce NAND flash memory, and implications for SanDisk (ticker: SNDK). Key excerpts:

The Intel-Micron joint venture, called IM Flash Technologies, will add some meaningful capacity to the industry by 2007, just as new production also comes online from Samsung, Toshiba and Hynix... Merrill Lynch analysts figure that the joint venture will account for 5% of global flash capacity in 2006 and 9% in 2007 -- overtaking SanDisk -- to become the world's fourth-largest producer...

Whether there's enough demand to reward all the producers may also hinge on which has an edge in technology. SanDisk and Toshiba have stolen a march on their rivals by producing NAND chips that hold 8 billion bits of data... SanDisk and Toshiba plan to double the data per chip, next year, by shrinking the transistors to about 50 billionths of a meter. Samsung says it will match them, by the second half of 2006...

The article also asks if a Sandisk-Micron legal battle may loom in the near future:

Will SanDisk get patent royalties from the IM Flash venture? SanDisk's Harari says that Intel already has a cross-license with his company, but Micron doesn't. "We think that for their NAND flash, they should seriously consider taking a license from us," says Harari. Pointing to SanDisk's continuing litigation against ST Micro, he adds, "We will do whatever we have to do to protect our" intellectual property.

If SanDisk takes patent action against Micron, the battle could drag on before any court rulings result. That's because Micron is a domestic manufacturer, so SanDisk can't go to the U.S. International Trade Commission for quick action -- as it did with STMicro. A Micron spokesman wouldn't discuss patent issues with me, but Intel's Billerbeck says he's studied the issues and feels "really comfortable" with the IM Flash venture's patent position.