Technology

SanDisk Has Some Problems

The revenues that the company announces are not so good

By Alexandru Pancescu, Hardware Editor

20th of July 2007, 13:07 GMT

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SanDisk Corporation is one of the world's largest supplier and producer of flash storage cards. The company announced today its results for the second year's quarter that ended on the first of July. The end results are not very good as officials from SanDisk declared that, excluding the impact of acquisition related expenses, stock compensation and related taxes, the total income during the second quarter was $72 million which is much lower than the income registered during the same period last

year.

"Demand for our products in the retail channel recovered nicely in the second quarter, resulting in record megabyte sales. In particular, SanDisk's growing strength in Europe and other international markets doubled our international unit sales compared to last year," said Eli Harari, Chairman and CEO.

"Product gross margins stabilized despite substantial price reductions in the second quarter. We expect product gross margins to improve gradually in the second half of the year, driven by more moderate price declines resulting from an expected improvement in the balance between demand and supply, declining manufacturing costs and strength in our income from royalties. The flurry of new Flash memory enabled, highly innovative consumer and mobile products coming from our customers, our competitors, and ourselves, we believe, will fuel strong demand for our products in the second half of 2007 and in 2008. Our strategic investments in leading edge technology and IP, captive low-cost manufacturing capacity, product innovation and global retail channels position us exceptionally well to profit in the expected industry growth cycle."

The company expects to stabilize the flash memory market and to increase their profits in the second half of the 2007 and the first months of 2008. Because vast numbers of consumer oriented gadgets are entering the market during these periods, and because most of them are based on NAND flash memory chips made by the SanDisk company, their optimism is perhaps well justified.

TAGS:

SanDisk | flash | NAND | memory | card

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