Tue, May 19, 2:00 PM
- SanDisk (SNDK +0.9%) CFO Judy Bruner stated at a JPMorgan conference today (webcast) her company has bought back $100M worth of its beaten-down shares thus far in Q2.
- Bruner also forecast SanDisk will see strong sequential growth in (seasonally stronger) 2H15 following a very rough start to the year, that its 15nm NAND flash process ramp is going as planned, and that it's aiming to return to positive enterprise sales growth in 2016 - 2015 enterprise sales have been hurt by a slew of issues.
- Shares remain down 30% YTD, after having plunged both in January and March on sales warnings. They trade for 15x a 2016 EPS consensus of $4.47. $1.9B ($9/share) worth of net cash was on the balance sheet at the end of Q1.
Sat, May 2, 3:42 PM
- iPhone/iPad combo chip supplier Broadcom (NASDAQ:BRCM) is providing a Wi-Fi/Bluetooth/NFC/FM radio combo chip for the Apple Watch (NASDAQ:AAPL), according to an ABI Research teardown of the Watch's S1 chip module. As expected, NXP supplies a complementary NFC controller.
- The teardown also uncovered a 6-axis STMicroelectronics (NYSE:STM) motion sensor (accelerometer/gyproscope). There has been some debate about whether InvenSense (NYSE:INVN) will be a motion sensor supplier for the Watch, as it is for the iPhone 6.
- Analog Devices (NASDAQ:ADI) supplies a touch controller IC. Barclays reported in March ADI had scored multiple design wins to enable Apple's Force Touch pressure-based response feature (supported by the Watch) on future iPhones/iPads.
- IDT (NASDAQ:IDTI) supplies a wireless charging IC. The design win comes after Samsung opted to use a Texas Instruments charging IC within the Galaxy S6; IDC supplies a chip for the S6's charging pad. Dialog Semi (OTC:DLGNF) provides a power management chip.
- SanDisk/Toshiba (NASDAQ:SNDK) supply an 8GB NAND flash chip, and Micron/Elpida (NASDAQ:MU) a 4Gb (512MB) SRAM chip. SRAM typically carries higher ASPs than DRAM for a given amount of capacity (it's also faster).
- In the near-term (and perhaps longer), Watch volumes will likely amount to a small fraction of iPhone volumes - whereas Apple sold 192.7M iPhones in 2014, IDC forecasts 15.9M 2015 Watch shipments, and more bullish estimates are still generally in the ~20M range. However, strong growth is expected over the next several years, and the first-gen Watch serves as a valuable reference win when competing for other smartwatch/wearable designs.
Thu, Apr. 16, 9:12 AM
Wed, Apr. 15, 5:47 PM
- SanDisk (NASDAQ:SNDK) has guided on its Q1 CC (webcast) for Q2 revenue of $1.15B-$1.225B and 2015 revenue of $5.4B-$5.7B, below consensus estimates of $1.45B and $6.15B and year-ago levels of $1.63B and $6.63B. Some of the weakness was priced in following SanDisk's March 26 Q1 warning.
- The NAND flash giant also forecasts gross margin (non-GAAP) will drop to 37%-40% in Q2 from Q1's 43%, which itself is down from Q4's 45% and Q1 2014's 51%. Soft prices and a mix shift away from enterprise sales are taking a toll. GM is expected to rise to 40%-43% in 2H15.
- SanDisk plans to cut 5% of its non-factory headcount. Its enterprise product teams are being merged, as are its mobile and client SSD teams. In addition, client SSD product chief Kevin Conley has been promoted to CTO.
- Issues contributing to the Q1/Q2 weakness: 1) Qualification delays for an embedded/client SSD design. 2) The phasing out of a client SSD program for a major client (Apple?). 3) Weak PCIe flash (read: Fusion-io) demand thanks to a demand shift towards enterprise SATA SSDs, where SanDisk's share is lower. 4) A shift within enterprise SATA towards 2TB drives; SanDisk will have one out later this year.
- Shares have dropped to $66.89 AH. The 52-week low is $63.00
- Q1 results, PR
Wed, Apr. 15, 4:11 PM
Wed, Apr. 15, 4:08 PM
Tue, Apr. 14, 5:35 PM
Mon, Apr. 6, 12:43 PM
- Following the 20%+ plunge seen in response to the company's Q1/2015 warning, SanDisk (NASDAQ:SNDK) is trading 40% below its replacement value (as measured in terms of fabs, royalty revenue, and cash), estimates Bernstein's Mark Newman. That, in turn, leads him to call the NAND flash giant a compelling buyout target.
- Newman adds there's "growing unrest" among SanDisk investors over its current valuation, and considers the company an "obvious" target for activists. His list of potential suitors includes NAND rivals Micron and SK Hynix, and hard drive giants Seagate and Western Digital.
- Of note: Antitrust regulators would closely vet a Micron or Hynix acquisition, given the potential pricing impact of further NAND consolidation. And Seagate recently formed a NAND alliance with Micron.
- Susquehanna also argues today SanDisk makes for a good buyout target, but focuses specifically on Western Digital (WDC +0.1%). The firm argues an acquisition of SanDisk by Western, which has already made a string of flash-related purchases (all enterprise-related) to protect its flank as SSDs continue encroaching on hard drives, would be accretive for Western in year 2 even at a 35% premium.
Fri, Mar. 27, 2:44 PM
- BofA/Merrill, Goldman, BTIG, and Evercore have downgraded SanDisk (SNDK -3.2%) since the company issued a Q1/2015 warning yesterday morning, and several other firms have slashed their targets. Shares have fallen 21% since the announcement.
- BofA's Simon Dong-je Woo (downgrade to Neutral) thinks SanDisk has lost SSD share to Samsung (particularly for Apple products), and is also concerned about the company's "slower execution" on ramping 15nm MLC and TLC NAND production. His new $85 target is still well above current levels.
- BTIG's Walter Piecyk (downgrade to Neutral): "The minimal amount of information provided by the company whenever it pre-announces as well as its inability to provide additional information for weeks ... leave investors in a vacuum with a lack of information ... The Q1 pre-announcement implies 15% decline in revenue and in the absence of any additional information, we do not expect the company to return to revenue growth until 2016, when its newer SSD products should be hitting full stride."
- Needham's Rajvindra Gill: "When we downgraded the stock on 1/12 ($97.04) we saw several structural challenges facing SNDK, which we think will persist: 1) unfavorable mix with 1/3 of revenue from removable products, where pricing is fierce; 2) a lack of mobile DRAM solution impeding growth in the China handset market as eMCP adoption accelerates; and 3) NAND GMs of 45% that are unsustainable relative to competition (+1500 bps higher)."
- Deutsche's Sidney Ho (target cut to $80) is staying bullish. [O]ur field checks suggest that the NAND market seems to have stabilized after severe price pressure in Q4. While we are lowering our estimates and price target, we continue to believe SNDK can turn things around and drive operating leverage in the back half of the year, especially with the help of better supply-demand dynamics."
Thu, Mar. 26, 5:11 PM
- Intel (NASDAQ:INTC) and NAND flash partner Micron's (NASDAQ:MU) 3D NAND solution enables chips with 384Gb (48GB) of capacity, or 3x that of existing 3D NAND parts. The companies promise "gum stick-sized SSDs with more than 3.5 terabytes of storage and standard 2.5-inch SSDs with greater than 10TB."
- Along with higher densities, Intel/Micron promise lower costs, improved read/write performance, and new sleep modes that cut power to inactive parts of a chip. A 256Gb multi-level cell (MLC) chip is sampling today, while a 384Gb tri-level cell (TLC) chip will sample later this spring. Mass-production is expected by Q4; Intel and Micron both plan to launch SSD lines relying on the chips "within the next year." SA author Electric Phred previously argued Intel/Micron could have a big cost advantage.
- The offerings take aim at Samsung, which has been shipping 3D NAND parts for several months, as well as Toshiba and partner SanDisk (SNDK - fell 18.5% today due to a Q1/2015 warning). Today, Toshiba/SanDisk announced a 48-layer 128Gb 3G NAND solution - the Intel/Micron solution features 32 layers, as do Samsung's current chips. The SanDisk/Toshiba offering relies on an advanced 15nm manufacturing process and is sampling today, but full commercial production isn't expected until 2016.
- Needham's Rajvindra Gill (Strong Buy on Micron) is pleased with today's news. "We think MU’s strategy of optimizing bits per area is the right approach in 3D NAND." At the same time, he notes Samsung's 3D offerings deliver major endurance, performance, and power benefits relative to 2D NAND.
- In other Intel-related news, the WSJ reports HP is close to selling a 51% stake in its H3C Chinese networking hardware unit to Tsinghua Unigroup. With Intel taking a 20% stake in Tsinghua last year as part of a mobile processor alliance, a deal could lead to greater use of Intel's CPUs, network processors, and switching chips within H3C's hardware.
- Intel doesn't separately break out its NAND sales. The business is part of an "All other" reporting segment that had 2014 revenue of $2.25B (+18% Y/Y). After initially falling due to SanDisk's warning, Micron closed up 0.3% today. Intel closed up 0.6%.
- Update: AnandTech estimates the Intel/Micron solution has an array efficiency (the % of the die that's dedicated to memory cells) of 85%, above the 66% and 72% respectively estimated for MLC and TLC Samsung chips. "I now understand why Intel-Micron claim that their 3D NAND technology comes with disruptive cost because it really is the most efficient 3D NAND technology we have seen so far."
Thu, Mar. 26, 12:49 PM
Thu, Mar. 26, 9:13 AM
Thu, Mar. 26, 7:43 AM
- SanDisk (NASDAQ:SNDK) -11.5% premarket after cutting its Q1 revenue guidance, citing certain product qualification delays, lower than expected sales of enterprise products and lower pricing in some areas of its business.
- SNDK also expects the rest of 2015 to be affected by those factors as well as its previously discussed supply challenges, and now forecasts FY 2015 revenue to be lower than previous guidance but the company does not provide a specific figure.
- For its Q1, SNDK now sees revenues of ~$1.3B, depending on final sell-through results, compared to its prior outlook of $1.4B-$1.45B; Wall Street consensus had foreseen ~$1.43B.
- SNDK also withdraws its other forecasts for the quarter and year, and says it will reschedule its investor day, which had been set for May.
Wed, Mar. 25, 2:10 PM
- Netlist (NASDAQ:NLST) has lost its breach of contract and trade secret misappropriation suit against flash controller IC vendor Diablo Technologies. Shares have cratered in response.
- Shares soared two months ago after the Northern California district court handling the suit placed an injunction on Diablo's controllers. Netlist has filed a separate infringement suit against Diablo and customer SanDisk (NASDAQ:SNDK) that's being handled by the same court (previous).
- Update: Diablo tells The Register the jury deliberating over the case unanimously concluded "there was no breach of contract and that there was no misuse of trade secrets," and "confirmed Diablo’s sole ownership and inventorship of the '917 patent'."
- Update 2: The jury's verdict form is now online (hat tip: SA commenter pj4272).
Tue, Mar. 24, 3:54 PM
- Buyback-happy U.S. firms are prohibited from repurchasing shares from about five weeks prior to releasing quarterly earnings to about 48 hours after those reports. These blackout periods, says Goldman, may offer an especially tasty time for investors to pick up shares of their favorites.
- "High valuations in the absence of corporate demand may weigh on stock prices," says Goldman's Amanda Sneider, and particular areas of focus are tech, consumer discretionary, and financials - they've accounted for more than 50% of buyback activity.
- Goldman's buyback blackout theme buys: SanDisk (NASDAQ:SNDK), Yahoo (NASDAQ:YHOO), Travelers (NYSE:TRV), Apple (NASDAQ:AAPL), Juniper Networks (NYSE:JNPR), Xerox (NYSE:XRX), Torchmark (NYSE:TMK), F5 Networks (NASDAQ:FFIV), Citrix Systems (NASDAQ:CTXS), Aon (NYSE:AON), Moody's (NYSE:MCO), VeriSign (NASDAQ:VRSN), Hartford Financial (NYSE:HIG), Ameriprise (NYSE:AMP), Corning (NYSE:GLW), Time Warner (NYSE:TWX), Seagate Technology (NASDAQ:STX), Viacom (NASDAQ:VIAB), Legg Mason (NYSE:LM), XL Group (NYSE:XL), DirecTV (NASDAQ:DTV), Allstate (NYSE:ALL), Nvidia (NASDAQ:NVDA), CBS (NYSE:CBS), Macy's (NYSE:M), Kohl's (NYSE:KSS).
Wed, Mar. 11, 9:24 AM
- Citing a more favorable valuation and expectations of a favorable 2015 NAND flash supply/demand balance, Goldman's Mark Delaney has upgraded SanDisk (NASDAQ:SNDK) to Conviction Buy, and hiked his target by $6 to $106.
- Delaney: "Low 2H14 NAND [chip equipment] orders imply supply growth will be reasonable for at least the next two quarters (there is a two quarter lag between orders and output), and demand should pick up from a seasonally slow 1Q (aided by higher NAND per phone)." He sees margins (under pressure lately) improving by 400 bps by Q4 with the help of a weaker yen and SanDisk's 15nm NAND production ramp.
- Delaney also sees SanDisk recently-launched enterprise flash storage array potentially driving long-term upside, and thinks concerns about the 2016 impact of 3D NAND adoption are overblown. "While this is a risk to monitor, we expect a reasonable ramp due to high capex requirements (3D requires 2X the tools as 2D), relatively high cost/bit for early 3D chips, and the fact that early 3D output is planned for SSDs (SSDs for OEMs need to be qualified, implying a delay from initial 3D output to volume ramp)."
- Micron (NASDAQ:MU), which fell 3.7% yesterday amid a market selloff and is down 21% YTD, is getting a lift from the upgrade. NAND accounted for 28% of Micron's November quarter sales.
- Morgan Stanley reported positive NAND checks two weeks ago.
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