dipswitch

4 Comments

    • ON: Fri Mar 14th 15:19 PM
      Commented on:
      The Spansion Expansion
      Good thoughts and analyses, with one key tragic flaw. I agree numonyx is not headed anywhere (though it will take a very long time to fall). I agree Phase Change is dead (anything after 20 years of development, that's still not manufacturable, ain't got it). I also agree that Spansion is in the leading process position.

      The tragic flaw? Exactly that: Spansion is in the leading process position. Therefore, they should also be the cost leaders... but they are not. This leads to one conclusion only: that the costs of ramping mirrorbit are staggering. It's not an easy technology by any stretch, and the costs of research, development, and ramping to high yeild can extend through the life of the product itself. Being a leader in fab technology is often associated with being a cost leader; but this is only true if the technology is manufacturable.
      View article »
    • ON: Wed Nov 28th 21:32 PM
      Commented on:
      Micron, SanDisk Struggle with Memory
      The commodity memory market has always been a feast/famine cycle, as your article correctly points out. The nature of Moore's law points out that this is a race to the bottom: whoever gets there first maintains a temporary edge over the competition. Added to that, the nonlinear nature of adding production ($4Billion and 2 years buys the next increment in capacity) keeps things highly volatile.
      True, Sandisk used to be above the fray. However their partnered investment in Fab 3 in '05-'07, and again in Fab 4 in '06-'08, has fundamentally changed their cost structure. They now will suffer the enormous capex and depreciation costs along with the rest of the commodity suppliers. Their "fundamental IP" is also fragile in the over-patented field of Flash technology (note the '517 patent ruled invalid), though it will continue to provide cash flow as licensing contracts are generally long term. Combined with the higher margin consumer market, they do deserve a higher multiple, but it is an open question as to which direction the multiple is moving.
      In the end it is all simply a high risk bet, and a long term waiting game: The supply/demand balance is unpredictable in both directions.
      View article »
    • ON: Wed Nov 28th 21:31 PM
      Commented on:
      Micron, SanDisk Struggle with Memory
      The commodity memory market has always been a feast/famine cycle, as your article correctly points out. The nature of Moore's law points out that this is a race to the bottom: whoever gets there first maintains a temporary edge over the competition. Added to that, the nonlinear nature of adding production ($4Billion and 2 years buys the next increment in capacity) keeps things highly volatile.
      True, Sandisk used to be above the fray. However their partnered investment in Fab 3 in '05-'07, and again in Fab 4 in '06-'08, has fundamentally changed their cost structure. They now will suffer the enormous capex and depreciation costs along with the rest of the commodity suppliers. Their "fundamental IP" is also fragile in the over-patented field of Flash technology (note the '517 patent ruled invalid), though it will continue to provide cash flow as licensing contracts are generally long term. Combined with the higher margin consumer market, they do deserve a higher multiple, but it is an open question as to which direction the multiple is moving.
      In the end it is all simply a high risk bet, and a long term waiting game: The supply/demand balance is unpredictable in both directions.
      View article »
    • ON: Wed Nov 28th 19:53 PM
      Commented on:
      Micron, SanDisk Struggle with Memory
      The commodity memory market has always been a feast/famine cycle, as your article correctly points out. The nature of Moore's law points out that this is a race to the bottom: whoever gets there first maintains a temporary edge over the competition. Added to that, the nonlinear nature of adding production ($4Billion and 2 years buys the next increment in capacity) keeps things highly volatile.
      True, Sandisk used to be above the fray. However their partnered investment in Fab 3 in '05-'07, and again in Fab 4 in '06-'08, has fundamentally changed their cost structure. They now will suffer the enormous capex and depreciation costs along with the rest of the commodity suppliers. Their "fundamental IP" is also fragile in the over-patented field of Flash technology (note the '517 patent ruled invalid), though it will continue to provide cash flow as licensing contracts are generally long term. Combined with the higher margin consumer market, they do deserve a higher multiple, but it is an open question as to which direction the multiple is moving.
      In the end it is all simply a high risk bet, and a long term waiting game: The supply/demand balance is unpredictable in both directions.
      View article »
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