SanDisk 2003 Annual Report Download - page 7

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through our website as soon as reasonably practicable after such material is electronically Ñled with, or
furnished to, the Securities and Exchange Commission.
""SanDisk'' is a registered trademark of SanDisk Corporation. All other trade names used in this report
are trademarks of their respective holders. Our website address is www.sandisk.com. Our principal executive
oÇces are located at 140 Caspian Court, Sunnyvale, California 94089 and our telephone number is (408) 542-
0500.
Recent Developments
On January 21, 2004 we announced that our Board of Directors had approved a two-for-one stock split of
our common stock to be eÅected in the form of a stock dividend. The stock split entitled each stockholder of
record at the close of business on February 3, 2004 (record date) to receive one additional share for every
share of SanDisk common stock held on that date. Our transfer agent distributed shares resulting from the
split on February 18, 2004 (payment date). Shares, share price, per share amounts, common stock at par value
and capital in excess of par value have been restated to reÖect the eÅect of the stock split for all periods
presented in the Form 10-K.
In February 2004, we committed to loan FlashVision up to approximately $150.4 million to fund
additional 200-millimeter fabrication capacity, through the end of Ñscal 2004. This loan is secured by the
equipment purchased by FlashVision using the loan proceeds. Additional loans are expected to be made in
several tranches through the Ñrst quarter of 2006. In addition, we are currently in discussions with Toshiba
regarding cooperating in the construction of a new 300-millimeter wafer fabrication facility, Fab 3, at
Toshiba's Yokkaichi operations. The total investment in Fab 3, excluding the cost of building construction, is
currently estimated at $2.5 billion through the end of 2006, of which our share is estimated to be
approximately $1.3 billion, with initial production currently scheduled for the end of 2005. We and Toshiba
have not yet agreed to the terms of this potential new venture.
Industry Background
In recent years, digital computing and processing have expanded beyond the boundaries of desktop
computer systems to include a broader array of consumer electronic, industrial and communications products.
These new devices include digital cameras, advanced mobile phones that incorporate digital cameras, PDAs,
highly portable computers, portable digital music players, digital video recorders, wireless base stations,
network computers, communication routers and switches, handheld data collection terminals, medical
monitors and other electronic systems. The storage requirements of these applications include small form
factor size, high reliability and storage capacity, low power consumption and the capability to withstand high
levels of shock and vibration and extreme temperature Öuctuations. Because storage products based on Öash
semiconductor technology can meet these requirements, these devices and systems represent market
opportunities for Öash storage systems. The Öash memory market is primarily comprised of NOR and NAND
technologies. NOR is traditionally used as an embedded memory for code storage and is characterized by fast
read speeds. The NAND Öash memory produced by SanDisk is traditionally used for both embedded and
removable data storage and is characterized by fast write speeds, high capacity and lower manufacturing cost.
The SanDisk Solution
We are focused primarily on three digital consumer markets: digital cameras and other consumer
electronics, multimedia cellular phones and USB Öash drives. Each of these markets is currently experiencing
signiÑcant growth:
‚Digital Cameras. Shipments of digital cameras exceeded shipments of traditional Ñlm cameras in
2003. Digital cameras have increased in terms of resolution quality, requiring Öash cards with greater
capacity. We make and sell Öash cards that are used as digital Ñlm in all the major brands of digital
cameras. Our cards are also used to store music in MP3 players, video in solid-state digital camcorders,
personal data in PDA's and maps in GPS devices.
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