SanDisk 2007 Annual Report Download - page 117

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December 30,
2007
December 31,
2006
January 1,
2006
As of
Long-Lived Assets:
United States................................. $227,630 $182,749 $126,346
Japan ...................................... 375,398 397,011 286,859
China ...................................... 116,936 24,149 240
Israel ...................................... 173,613 50,355 8,868
Other foreign countries ......................... 3,981 5,555 368
Total......................................... $897,558 $659,819 $422,681
Revenues are attributed to countries based on the geographic location of the customers. Long-lived assets are
attributed to the geographic location in which they are located. The Company includes in long-lived assets, property
plant and equipment, long-term investment in foundry, and equity investments and attributes those investments to
the location of the investee’s primary operations.
Customer and Supplier Concentrations. A limited number of customers or licensees have accounted for a
substantial portion of the Company’s revenues. Revenues from the Company’s top 10 customers or licensees
accounted for approximately 46%, 52% and 50% of the Company’s revenues for the fiscal years ended Decem-
ber 30, 2007, December 31, 2006 and January 1, 2006, respectively. All customers were less than 10% of the
Company’s total revenues in fiscal years 2007 and 2006. In 2005, Best Buy Co., Inc., accounted for 11% of the
Company’s revenues and all other customers were less than 10% of the Company’s revenues.
All of the Company’s flash memory card products require silicon wafers for the memory components and the
controller components. The substantial majority of the Company’s memory wafers or components are currently
supplied from FlashVision Ltd., or FlashVision, Flash Partners Ltd., or Flash Partners, and Flash Alliance Ltd., or
Flash Alliance, (collectively “Flash Ventures”) and to a lesser extent by Samsung and Hynix Semiconductor, Inc.
The Company’s controller wafers are primarily manufactured by Semiconductor Manufacturing International
Corporation, Taiwan Semiconductor Manufacturing Corporation, Tower Semiconductor Ltd. (“Tower”) and United
Microelectronics Corp. (“UMC”), or controller chips are purchased from other third party suppliers. The failure of
any of these sources to deliver silicon wafers could have a material adverse effect on the Company’s business,
financial condition and results of operations. Moreover, Toshiba’s employees that produce Flash Ventures’ products
are covered by collective bargaining agreements and any strike or other job action by those employees could
interrupt the Company’s wafer supply from Toshiba’s Yokkaichi, Japan operations.
In addition, key components are purchased from single source vendors for which alternative sources are
currently not available. Shortages could occur in these essential materials due to an interruption of supply or
increased demand in the industry. If the Company were unable to procure certain of such materials, it would be
required to reduce its manufacturing operations, which could have a material adverse effect upon its results of
operations. The Company also relies on third-party subcontractors to assemble and test its products. The Company
has no long-term contracts with these subcontractors and cannot directly control product delivery schedules. This
could lead to product shortages or quality assurance problems that could increase the manufacturing costs of its
products and have material adverse effects on the Company’s operating results.
Concentration of Credit Risk. The Company’s concentration of credit risk consists principally of cash, cash
equivalents, short and long-term investments and trade receivables. The Company’s investment policy restricts
investments to high-credit quality investments and limits the amounts invested with any one issuer. The Company
sells to original equipment manufacturers, retailers and distributors in the United States, Japan, EMEA and non-
Japan Asia-Pacific, performs ongoing credit evaluations of its customers’ financial condition, and generally
requires no collateral.
F-21
Notes to Consolidated Financial Statements — (Continued)