SanDisk 2010 Annual Report Download - page 135

This is a TAB type table. Insert
conts here. Annual Report
We support our retail sales channels with both direct sales representatives and independent
manufacturers’ representatives. Our sales activities are organized into four regional territories:
Americas; Europe, Middle East and Africa, or EMEA; Asia Pacific, or APAC; and Japan.
As of the end of fiscal years 2010 and 2009, our backlog was $380 million and $268 million, respectively.
Because our customers can change or cancel orders with limited or no penalty and limited advance notice prior to
shipment, we do not believe that our backlog, as of any particular date, is indicative of future sales.
Because our products are primarily destined for consumers, our revenue is generally highest in our fourth
quarter due to the holiday buying season. In addition, our revenue is generally lowest in the first quarter of the
fiscal year.
In fiscal years 2010, 2009 and 2008, revenues from our top 10 customers and licensees accounted for
approximately 46%, 42% and 48% of our total revenues, respectively. All customers were individually less than
10% of our total revenues in fiscal years 2010 and 2009. In fiscal year 2008, Samsung accounted for 13% of our
total revenues through a combination of license and royalty and product revenues. The composition of our major
customer base has changed over time, and we expect this pattern to continue as our markets and strategies
evolve. Sales to our customers are generally made pursuant to purchase orders rather than long-term contracts.
Technology
Since our inception, we have focused our research, development and standardization efforts on developing
highly reliable, high-performance, cost-effective flash memory storage products in small form factors to address
a variety of emerging markets. We have been actively involved in all aspects of this development, including flash
memory process development, module integration, chip design, controller development and system-level
integration, to help ensure the creation of fully-integrated, broadly interoperable products that are compatible
with both existing and newly developed system platforms. We successfully developed and commercialized
2-bits/cell flash MLC, or X2, technology, which enabled significant cost reduction and growth in NAND flash
supply. In addition, we have recently developed and successfully commercialized 3-bits/cell flash MLC, or X3,
and 4-bits/cell flash MLC, or X4, technologies. In addition, we are investing in the development of 3D memory
architecture with multiple read-write capabilities. We have also initiated, defined and developed standards to
meet new market needs and to promote wide acceptance of these standards through interoperability and
ease-of-use. We believe our core technical competencies are in:
• high-density flash memory process, module integration, device design and reliability;
• securing data on a flash memory device;
• controller design and firmware;
• system-level integration;
• compact packaging; and
• low-cost system testing.
To achieve compatibility with various electronic platforms regardless of the host processors or operating
systems used, we developed new capabilities in flash memory chip design and created intelligent controllers. We
also developed an architecture that can leverage advances in process technology designed for scalable, high-
yielding, cost-effective and highly reliable manufacturing processes. We design our products to be compatible
with industry-standard interfaces used in standard operating systems for PCs, mobile phones, gaming devices,
digital media players and other consumer and industrial products.
Our patented intelligent controller technology, with its advanced defect management system, permits our
flash storage card products to achieve a high level of reliability and longevity. Each one of our flash devices
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