SanDisk 2013 Annual Report Download - page 105

Customer Concentration
In fiscal years 2013, 2012 and 2011, revenue from our top 10 direct customers and licensees accounted
for approximately 49%, 43% and 48% of our revenue, respectively. In fiscal year 2013 and 2012,
Apple Inc., or Apple, accounted for 20% and 13% of our revenue, respectively. In fiscal year 2011,
Samsung Electronics Co., Ltd., or Samsung, accounted for 10% of our revenue. 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 NAND flash storage products in small form
factors to address a variety of markets. Our research and development, or R&D, efforts are designed to
help ensure the creation of fully-integrated, broadly interoperable products that are compatible with both
existing and newly developed system platforms. We have successfully developed and commercialized 2-bits/
cell flash multi-level cell, or X2, and 3-bits/cell flash multi-level cell, or X3, technologies, which have
enabled significant cost reduction and growth in NAND flash usage. In addition, we are investing in the
development of our 3D NAND technology, which we refer to as BiCS, and 3D ReRAM memory
architecture. We have also initiated, defined and developed standards to meet new market needs and to
promote wide acceptance of flash storage standards through interoperability and ease-of-use. We believe
our core technical competencies are in:
• high-density NAND flash process, module integration, device design and reliability;
• securing data on a flash device;
• controller design;
• firmware and software development;
• system-level integration;
• multi-die stacking and packaging technology; and
• low-cost system testing.
To achieve compatibility with various electronic platforms regardless of the host processors or
operating systems used, we continue to develop new capabilities in NAND flash, advanced controllers and
firmware design. We also continue to evolve our architecture to leverage advances in manufacturing
process technology. Our products are designed to be compatible with industry-standard and customer-
specific interfaces used in operating systems for PCs, mobile phones, tablets, notebooks, digital cameras,
gaming devices, GPS devices, servers and other computing and electronic devices.
Our sophisticated controller and firmware technologies permit our flash storage solutions to achieve a
high level of reliability and longevity. Each one of our flash devices contains millions of flash memory cells.
A failure in any one of these cells can result in loss of data. Our system technologies, including our
controller chips and firmware, are designed to detect such defects and prevent loss of data under most
conditions.
Patents and Licenses
We rely on a combination of patents, trademarks, copyright and trade secret laws, confidentiality
procedures and licensing arrangements to protect our IP rights. See Item 1A, ‘‘Risk Factors.’’
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Annual Report