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Table of Contents
charge through our website as soon as reasonably practicable after electronic filing with, or furnishing to, the SEC. Information
regarding the operation of the SEC’s public reference room may be obtained by calling the SEC at 1−800−SEC−0330. Our website
address is www.sandisk.com. Information on our website is not incorporated by reference nor otherwise included in this report. Our
principal executive offices are located at 140 Caspian Court, Sunnyvale, California 94089 and our telephone number is
(408) 542−0500. “SanDisk” is a registered trademark of SanDisk Corporation. All other trade names used in this report are trademarks
of their respective holders.
Description of Our Business
Industry Background. The digital computing industry includes traditional computers and consumer electronic, communications
and industrial products. We focus our products on digital consumer devices like digital cameras, feature phones, personal digital
assistants, or PDAs, personal computers, portable digital audio players and digital video recorders, as well as industrial devices, like
communication routers and switches. The storage requirements of these applications include small form factor size, high reliability
and storage capacity, low power consumption and the capability to withstand high levels of shock and vibration and extreme
temperature fluctuations.
The flash memory market is primarily comprised of NOR and NAND technologies. NOR is characterized by fast read speeds and
generally has a higher cost per megabyte than NAND flash. We are focused on NAND−based products. NAND flash memory is
traditionally used for embedded and removable data storage and is characterized by fast write speeds, high capacity and lower
manufacturing cost than NOR flash memory.
Our Primary Markets. We currently focus primarily on four digital consumer markets: digital cameras and other consumer
devices, feature phones, USB flash drives and digital audio players.
• Digital Cameras and Other Consumer Devices. Shipments of digital cameras exceeded shipments of traditional film cameras in
2003 and 2004. The resolution quality of digital cameras has improved requiring flash storage cards with greater capacity. We
make and sell flash storage cards that are used as the film for all major brands of digital cameras. Our cards are also used to store
video in solid−state digital camcorders, personal data in PDAs, maps in global positioning system, or GPS, receivers and music
in digital audio players.
• Feature Phones. Feature phones are phones that contain one or more multimedia features such as camera functionality, audio/
MP3, games, video or internet access. These features require increasing storage capacity in the phone. We are a leading supplier
of miniSD, SD, TransFlash, MMC and reduced sized MMC, or RS− MMCtm, cards for removable storage in many of these
feature phones.
• USB Flash Drives. USB flash drives allow consumers to store computer files on keychain−sized devices and then quickly and
easily transfer these files between laptops, desktops and other devices. We believe USB flash drives will be a key factor in the
evolution of mobile computing. In 2004, we announced our collaboration with M−Systems Flash Disk Pioneers, Ltd., or
M−Systems, on the U3 platform, which is designed to make the USB drive a platform for on−the−go computing.
• Digital Audio Players. Digital audio players allow consumers to download, store and play music. In 2004, we introduced a
digital audio player with embedded flash memory and storage capacity of up to 1 gigabyte or 32 hours of music.
In July 2004, Semico Research Corporation estimated the size of the flash storage card market, measured in revenues, to be
approximately $7.5 billion for 2004 and also estimated that the market would grow to $34.3 billion by 2008. In November 2004,
Gartner, Inc. estimated the size of the USB Flash Drive market to be approximately $1.4 billion for 2004 and also estimated that the
market would grow to $3.1 billion by 2008. In December 2004, IDC estimated the size of the worldwide portable flash digital audio
player market would grow from approximately $2.7 billion for 2004 to $4.3 billion in 2008.
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