Semiconductors
With Lexar selling and MSystems selling, I think it's fairly obvious that that's a very difficult model," says Seligman Technology's Peruri.
Sandisk has a joint venture with Toshiba, the creator of flash memory, under which the two manufacture flash chips together and share the output. Monday's acquisition also represents the latest move by SanDisk to collect firms that are developing next-generation versions of flash memory. In November 2005, SanDisk acquired Matrix Semiconductor, which has technology with the potential to vastly increase the amount of data that can be stored on a flash chip. MSystems has its own next-generation flash technology, dubbed x4, which promises to double the amount of storage per cell and thus lower production costs. "SanDisk believes that the only way to continue to have the kind of growth in the NAND market that they have enjoyed in past is to continue to force consumer prices down at a very fast rate," says Jim Handy, a flash memory analyst at market research firm Semico. With x4 and the Matrix technology, SanDisk is positioning itself to undercut competitors' prices by being at the leading edge of flash innovation. Of course, the x4 technology is still not in volume production, which means its real-world benefit is still not proven. "You never know what the obstacles are until you get into mass production," says Handy. "And since it is not in mass production, there ain't no telling."TheStreet Premium Services
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