SanDisk 2014 Annual Report Download - page 78

Seasonality
Because the majority of our products are ultimately sold to consumers, our revenue is generally
highest in our fourth fiscal quarter due to the holiday buying season. In addition, our revenue is generally
lowest in our first fiscal quarter.
Customer Concentration
In fiscal years 2014, 2013 and 2012, revenue from our top 10 direct customers and licensees accounted
for approximately 48%, 49% and 43% of our revenue, respectively. In fiscal year 2014, 2013 and 2012,
Apple Inc., or Apple, accounted for 19%, 20% and 13% of our revenue, respectively. 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
per cell flash multi-level cell, or X2, and 3-bits per 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 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 design and 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 imaging
devices, gaming platforms, GPS products, servers and storage systems, 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.
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