A big reason why SanDisk is seeing growth in the...
A big reason why SanDisk is seeing growth in the client solid state drive business is that the industry has reached the “sweet spot” on SSD pricing, Chief Financial Officer Judy Bruner told an investor conference in New York on…
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Tuesday. SanDisk long believed that sweet spot was about $1 per gigabyte, and that’s the threshold the industry recently reached, she said. Growth of SSD usage for notebooks was “less about the delta in the cost between” SSDs and hard drives than it was about reaching the sweet spot in SSD pricing, she said. SanDisk still expects there will be “continued supply demand imbalance” in the flash memory market industrywide in Q2, with “continued weakness in mobile card demand” being a “key contributor” to that imbalance, she said. “There is very little wafer capacity growth going on, we believe,” in Q2, and the rest of this year will be similar, she predicted. Bruner said SanDisk still expects to see “much improved supply demand imbalance” in the back half of this year. In the second half of 2012, the company expects to grow its mobile business quarter-over-quarter due to its new embedded products, and continue to make “strong share gains” in its client and enterprise SSD business, while gaining share at “leading mobile OEMs,” she said. The supply/demand imbalance was what led to the significant pricing decline that SanDisk reported for Q1 (CED April 23 p3), she said. SanDisk saw a 22 percent decline in average selling price per GB in Q1, she said. SanDisk had decided to continue pausing capacity expansion at its Fab 5 facility, but recently decided to not restart that expansion “any time this year,” the CFO said. “The soonest we will restart wafer capacity expansion is sometime in 2013” at Fab 5, she said. SanDisk has No. 1 market share in “the combination of cards and USB drives” in the U.S., Europe and Asia, Bruner said. Also at the conference, Brian Shirley, vice president of DRAM solutions at Micron Technology, said the graphics business has been “in a bit of a slump.” But, looking to 2013 and beyond, “there are some good trends happening, specifically with the new generation of game consoles,” he said. Microsoft, Nintendo and Sony all will be shipping new game systems, he said. “Those kinds of game consoles require very, very high-end memory,” more along the lines of “server and networking architectural memory as opposed to what used to be more of a PC type of memory,” he said.