Zeev's Turnips Patch-No Politics (ZEEV)

[goodluck]

re:SNDK
Zeev, Bobbigirl and anyone else interested in SNDK,
Here is an article from SI/Yahoo on NAND flash pricing and demand--apparently it is firming again, which suggests that SNDK won't be heading down anytime soon unless the general market takes it down. It is a great time to be doing a secondary--the company will make money since it is so far above book value and the buyers will likely make money because its fundamentals will continue to be strong. My guess is that the secondary will happen pretty soon--certainly by the second week of Sept, and probably sooner than that, presuming the general tech market holds up. And not too long after it happens, SNDK will declare a split, though they may wait for their third quarter report/CC to declare the split. Everything except perhaps TSEM should be going their way over the next couple of quarters.


NAND demand ends flash memory bargains

http://www.ebnonline.com/printableArticle.jhtml;jsessionid=U...
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After a precipitous drop in the first half of the year, NAND flash prices have stabilized and in lower densities have even started to rise.

Vendors cite tightening supplies because of sharply higher demand for NAND flash in digital cameras, smart cell phones, and new applications ranging from secure smartcards to USB-enabled disk players.

Toshiba Corp. attributed some of the supply squeeze in its initial phase to lower yields as producers transitioned along the learning curve to 0.12-micron processing, but the company claimed that this is no longer a problem.

Analysts said that growing demand has caused the two major NAND producers, Toshiba and market leader Samsung Electronics Co. Ltd., to call off the pricing slugfest waged throughout much of the year as the suppliers fought for market share. With increasing demand, "the companies no longer feel they have to battle on price," said Allen Leibovitch, an analyst with IDC in Mountain View, Calif.

A steep price cut for flash cards by SanDisk Corp. also caused chip suppliers to slash their NAND price tags in the first quarter.

Prices firming
"In the first quarter we saw new, lower prices almost every day. Now prices have leveled off as supply has gotten much tighter," said Chuck Schouw, president of M-Systems Inc., the Newark, Calif.-based subsidiary of Israeli flash cardmaker M-Systems Flash Disk Pioneers. "Lead times on deliveries are now stretching out, in some cases to three months. Earlier this year, customers were able to get off-the-shelf delivery."

The price of 64-, 128-, and 256-Mbit NAND chips plunged by a third from the third quarter of 2002 to the second quarter of this year, according to Semico Research Corp., Phoenix. Tags for 256Mbit and 1Gbit chips plummeted by nearly half over the same period, although vendors said some of the decline reflected increasing volumes as production ramped up. The prices for 64- and 128Mbit devices have since begun bouncing back, while higher-density NAND ASPs are no longer falling.

Jim Handy, nonvolatile memory analyst at Semico, said the tighter supplies "are a product-mix issue, as manufacturers transition more production from lower- to higher-density NAND chips. When the three suppliers Samsung, Toshiba, and Ren- esas switch production at the same time, it can create problems" for supplies of lower-density chips.

Shoe on other foot?
NAND customers in the last year became accustomed to dictating lower prices in an oversupplied market, said Alan Niebel, an analyst with Web-Feet Research Inc., Monterey, Calif. "Now, with prices firming up, buyers suddenly have to start catering to manufacturers, especially on delivery schedules."

Indeed, Renesas Technology Corp., which produces a version of NAND known as AND flash, expects mushrooming demand will outstrip supply for most of the second half of this year, despite a push by vendors to increase production.

"Many customers are now concerned enough to start booking orders up to several months in advance," said Tad Keeley, Renesas' senior memory products marketing manager.

Toshiba said the growing NAND shortage is forcing it to resort to "shipping plans," the term the company uses in place of allocation. Scott Nelson, business development manager for memory products, said Toshiba has now stretched average NAND deliveries into the fourth quarter.

At Samsung, Steffen Hellmold, director of flash marketing, claimed that spiraling demand has caused a NAND shortage of 15% to 20% over available supply. "The supply situation is especially acute for 512Mbit and 1Gbit flash," he said. "We are having to put some customers on allocation for some densities."

Hellmold added that a few customers have even been willing to pay more than the market price to get delivery of certain scarce NAND parts.

NAND vendors claimed that they are increasing production to meet demand and denied industry rumors they have been intentionally cutting output in order to force prices up.

Keeley said Renesas has staged a mid- to high-double-digit increase in AND flash production between the first and second quarters and "has significant plans" to expand AND production at its 300mm-wafer fab in Japan.

Samsung has kept to its historical trend of doubling year-over-year per-bit NAND production rates each quarter, according to Hellmold. The company also plans to start building NAND flash at a 300mm-wafer fab in the near future, he said.