Earlier this week, SanDisk Corp. (NASDAQ:SNDK), the leading flash memory chipmaker with annual revenue of $3.35 billion, renewed its patent licensing agreement with Samsung that was to expire in August of this year. Last year, Samsung was trying to acquire SanDisk, which is struggling with huge losses. Also last year, there was speculation that Seagate might acquire SanDisk. Let’s take a closer look at both companies’ performances.
In the new licensing deal with Samsung, the royalty rate has been reduced by about 50%. Samsung paid $350 million in royalties to SanDisk in 2008, according to analyst estimates. Last year, Samsung withdrew its $5.85 billion takeover bid and as per a recent interview with CEO Eli Harari.