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PART I
ITEM 1. BUSINESS
Statements in this report, which are not historical facts, are forward-looking statements within the meaning
of the federal securities laws. These statements may contain words such as “expects,” “anticipates,” “intends,”
“plans,” “believes,” “seeks,” “estimates” or other wording indicating future results or expectations. Forward-
looking statements are subject to risks and uncertainties. Our actual results may differ materially from the
results discussed in these forward-looking statements. Factors that could cause our actual results to differ
materially include, but are not limited to, those discussed in “Risk Factors” in Item 1A of this report, and
elsewhere in this report. Our business, financial condition or results of operations could be materially adversely
affected by any of these factors. We undertake no obligation to revise or update any forward-looking statements
to reflect any event or circumstance that arises after the date of this report. References in this report to
“SanDisk®,” “we,” “our,” and “us,” collectively refer to SanDisk Corporation, a Delaware corporation, and its
subsidiaries. All references to years or annual periods are references to our fiscal years, which consisted of 52
weeks in 2008, 2007 and 2006.
Overview
Who We Are. SanDisk Corporation, a S&P 500 company, is the inventor of and worldwide leader in
NAND-based flash storage cards. Flash storage technology allows data to be stored in a durable, compact format
that retains the digital information even after the power has been switched off. Our mission is to provide simple,
reliable and affordable storage at different capacities for consumer use in a wide variety of formats and devices.
We sell SanDisk branded products for consumer electronics through broad global retail and original equipment
manufacturer, or OEM, distribution channels.
We design, develop and manufacture products and solutions in a variety of form factors using our flash
memory, controller and firmware technologies. We source the vast majority of our flash memory supply through
our significant flash venture relationships with Toshiba Corporation, or Toshiba, which provide us with leading-
edge, low-cost memory wafers. Our card products are used in a wide range of consumer electronics devices such
as mobile phones, digital cameras, gaming devices and laptop computers. We also provide high-speed and high-
capacity storage solutions, known as solid-state drives, or SSDs, that can be used in lieu of hard disk drives in a
variety of computing devices, including personal computers and enterprise servers. We also produce Universal
Serial Bus, or USB, drives, and MP3 players as well as embedded flash storage products that are used in a variety
of systems for the enterprise, industrial, military and other markets.
Our Strategy. Our strategy is to be an industry-leading supplier of flash storage solutions and to develop
large scale markets for flash-based storage products. We maintain our technology leadership by investing in
advanced technologies and flash memory fabrication capacity in order to produce leading-edge, low-cost flash
memory for use in end-products that we design and market. We are a one-stop-shop for our retail and OEM
customers, selling all major flash storage card formats for our target markets in high volumes.
Our revenues are driven by the sale of our products and the licensing of our intellectual property. We
believe the market for flash storage is price elastic, meaning that a decrease in the price per megabyte results in
demand for higher capacity and the emergence of new applications for flash storage. We continuously reduce the
cost of NAND flash memory, which we believe over time will enable new markets and expand existing markets
and allow us to achieve higher overall revenue. However, pricing in the NAND flash industry depends on the
balance between supply and demand, and in periods of oversupply, price declines can more than offset unit
growth, leading to a decline in product revenues, as was the case in fiscal year 2008. In the last three years, price
decline has been greater than cost decline due to industry-wide oversupply of NAND flash memory, resulting in
a decline in our product gross margin, which was negative in fiscal year 2008.
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