SanDisk 2009 Annual Report Download - page 65
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This is a TAB type table. Insert
conts here. Annual Report
and Toshiba at cost plus a mark-up. We are committed to purchase half of each venture’s NAND wafer supply or
pay for half of the venture’s fixed costs regardless of the output we choose to purchase. We are also committed to
fund 49.9% of each venture’s costs to the extent that the venture’s revenues from wafer sales to us and Toshiba
are insufficient to cover these costs. The investments in each venture entity are shared equally between us and
Toshiba. Our committed capacity from Flash Ventures was approximately 1.5 million wafers per year as of the
end of fiscal year 2009. In addition, we have the right to purchase a certain amount of wafers from Toshiba on a
foundry basis.
Competition
We face competition from numerous flash memory semiconductor manufacturers and manufacturers and
resellers of flash memory cards, USB drives and digital audio players. We also face competition from
manufacturers of hard disk drives and from new technologies.
We believe that our ability to compete successfully depends on a number of factors, including:
• price, quality and on-time delivery of products;
• product performance, availability and differentiation;
• success in developing new applications and new market segments;
• sufficient availability of cost-efficient supply;
• efficiency of production;
• ownership and monetization of intellectual property rights;
• timing of new product announcements or introductions;
• the development of industry standards and formats;
• the number and nature of competitors in a given market; and
• general market and economic conditions.
We believe our key competitive advantages are:
• our tradition of technological innovation and standards creation which enables us to grow the overall
market for flash memory;
• our intellectual property ownership, in particular our patents and MLC manufacturing know-how,
provides us with license and royalty revenue as well as certain cost advantages;
• Flash Ventures provide us with leading edge, low-cost flash memory;
• we market and sell a broader range of card formats than any of our competitors, which gives us an
advantage in obtaining strong retail and OEM distribution;
• we have global retail distribution of our products through worldwide retail storefronts; and
• we have worldwide leading market share in removable flash cards and UFDs.
Our competitors include:
Flash Memory Semiconductor Manufacturers. Our primary semiconductor competitors include Hynix, Intel,
Micron, Samsung, and Toshiba.
Flash Memory Card and USB Drive Manufacturers. Our primary card and USB drive competitors include,
among others, A-DATA Technology Co., Ltd., or A-DATA, Buffalo, Inc., or Buffalo, Chips and More GmbH, or
9