rd4sndk

All Quiet on the DRAM Front: Can Micron Survive the War of Attrition?

I can not believe someone is trying to put lipstick on this pig of an investment. You should try a list of worstening scenarios that suggest under what conditions would micron become insolvent. As I see it, smart money will start to exit micron no later than 1Q09 and that micron will receive a bit somewhere in the 2Q09. At a current market cap of $3.4B (4.4 pps), it's p/b at 50% would suggest that with a little further deteriation in its share price, one can pick up at least two 300mm mfg plants for the fire sale price of $4 Billion. Throw in the other operations and a hefty 25% layoff after acquisition micron is ripe for the picken. Buying micron would benefit Samsung or Hynix well as all two are in the 3 basic businesses that Micron operates. Sandisk would also benefit in buying Micron because they would eliminate another major nand competitor while improving its royalty stream, and more importantly give Sandisk an upper edge in removing Intel from the nand business. If Sandisk were to buy Micron, this could usher in a greater collaboration between Intel and Sandisk and would go further to solidify Sandisk/Toshiba partnership as the defacto standard for nand chips and cards.

STEC Design Win at Apple: Short-lived Catalyst?

Before you start counting Intel and Samsung chickens, you should first wait until they meet the design constraints. No one has produced a SSD at performance and price points like STEC. If Sandisk was smart they would scoop up STEC ASAP before its too late. Intel is targetting 2H08 and Sandisk 2009. Both are at least a year behind STEC in performance specs and customer qualifications. My money's on STEC. A bird in the hand is worth Intel or Sandisk in the bush.

SanDisk: Risk Down $3, Reward Up $30

I'm sorry but you are late to the party as are most analyst and MM. Dispite all of your partificating around nand spot pricing, Sandisk has never been and is currently not dependent to much extent on spot pricing of nand. One need only look at 2006 numbers where you analyst were expecting, for most of that year, for sandisk to report disappointing earnings. Stock price fail based on your flawed understanding of Sandisk business model a value proposition. However, earnings increased 25% while Revenue increase over 75%. Need more proof that you're full of hot air? Look no further than 1Q07 when nand pricing fail 24% during the quarter but Sandisk, unlike other semi providers that report huge losses in their Nand operations, reported inline earnings (excluding impact of mystems acquisition).

Sandisk global market share expansion and improved cost efficientcies from its latest card assembly plant, increasing average card density is what's currently fueling its top/bottom line growth. Additionally, inventories are low going into the 1Q08 at a time when YoY demand is accellarating.

Although I agree with some of your reasoning, your inability to evaluate Sandisk as card producer and the only one of its kind leaves me to reject your analysis for investment advise. However, these monkeys that listen to you control the price of the stock and for that reason I appauld your positive although ill imformed opinion.

Micron, SanDisk Struggle with Memory

You're exactly why Sandisk price doesn't reflect its earnings and earnings growth. If you knew anything about sandisk you would know that its not a semi-conductor component supplier--despite analyst attempts to paint it as one. What Eli has done was to evolve sandisk into a vertically integrated mfg of flash memory cards and Consumer Electronics business model that is protected by fundamental Nand IP.

This is unique in that most companies abandoned vertically integrated semiconductor business when the Japanese and then the Koreans took over the semiconductor fab business and made it into a commondity business.

Eli correctly assumed as you do in your article that the business of consuming chips will be better than the business of making them. By partnering with Toshiba, Sandisk has an advantage over all consumers of nand as long as they stay at fabrication leading edge. It also has an advantage over the semiconductor suppliers by its fundamental IP.

There was only once in the past 7 years that Sandisk business model didn't work and that was last year when they absorbed both matrix and msystem in one year. Prior to that, you analyst kept looking for Sandisk earnings to turn south against lexar and the other nand consumers as their business model was based on Nand as a commodity. We all know what happened to Lexar.

With the msystem acquisition behind them, we longs are looking for Sandisk to get back to operating margins of 20% and earnings growth of 25%. It's interesting that if you plot the earnings of Sandisk and the price of its stock on the same graph, you will see that Sandisk is the most misunderstood company I know.