SanDisk 2012 Annual Report Download - page 7

Stockholders Letter
Continued Leadership in Flash Memory Technology
We continue to make progress on our three-pronged strategy for memory technology. First, we are scaling the
current 2-dimensional NAND flash technology as far as manufacturing tool capabilities will permit. Our current
19-nanometer technology node will remain the main manufacturing technology for much of 2013. Later in 2013,
we plan to begin the transition to our 1Y-nanometer technology node and we are working on development of a
1Z-nanometer node. Second, we are making good progress in developing Bit Cost Scalable (BiCS) NAND
technology, which is a vertical, 3-Dimensional NAND technology architecture. This technology, we believe, can
leverage our existing manufacturing infrastructure and provide a mid-term solution until our third prong becomes
commercially feasible. The third prong is our 3-Dimensional resistive RAM (ReRAM) technology, which we
believe could be the ultimate successor to both 2-Dimensional NAND and BiCS NAND technologies. We
believe that our three-pronged technology strategy positions us well for continued leadership in solid-state
technology.
Vertical Integration: A Key SanDisk Advantage
Our vertically integrated business model, which includes high-volume NAND-flash manufacturing facilities in
ventures with Toshiba Corporation, provides us leading-edge captive wafer capacity. We also benefit from our
captive Shanghai, China-based facilities to assemble and test our products. Our products are created in our global
research and development labs with concurrent NAND memory, controller and firmware development, and this
integrated approach has been a key enabler of our success over the last 25 years. As we look into the future, and
as our business becomes increasingly OEM and enterprise driven, we believe that our vertical integration
capabilities will become even more of a key differentiator for, and an enabler of, our continued success.
Summary
As we look back on the past quarter century of the flash memory industry, it is important to take note of how far
we have come. In 2012, we made strong progress on many fronts and exited the year with solid momentum.
Looking forward to SanDisk’s 25th anniversary as a company in 2013, it is clear to me that our future has never
been brighter.
We are a leader in the markets we helped create and we are expanding our reach into rapid growth areas such as
SSDs. Our strong balance sheet provides us with the flexibility to make strategic investments, which will
enhance our ability to build long-term shareholder value. I would like to thank our employees for their dedication
and contribution to SanDisk’s success. I would also like thank you for your continued support of SanDisk and I
hope you will remain an important member of our exciting journey.
Sincerely yours,
Sanjay Mehrotra
Co-founder, President and Chief Executive Officer