SanDisk 2010 Annual Report Download - page 133

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Our industry is characterized by rapid technology transitions. Since our inception, we have been able to
scale NAND technology through fourteen generations over approximately twenty years. However, the pace at
which NAND technology is transitioning to new generations is expected to slow due to inherent physical
technology limitations. We currently expect to be able to continue to scale our NAND technology through a few
additional generations, but beyond that there is no certainty that further technology scaling can be achieved cost
effectively with the current NAND flash technology and architecture. We also continue to invest in future
alternative technologies, including our 3-Dimensional, or 3D, Read/Write technology, which we believe may be
a viable alternative to NAND when NAND can no longer scale at a sufficient rate, or at all. However, even when
NAND flash can no longer be further scaled, we expect NAND and potential alternative technologies to coexist
for an extended period of time.
In addition to flash memory, our products include controllers that interface between the flash memory and
digital consumer devices. We design our own memory controllers and have them manufactured at wafer foundry
companies. Our finished flash memory products, which include the NAND flash memory, controller and outer
casing, are assembled at our in-house assembly and test facility in Shanghai, China, and through our network of
contract manufacturers.
We sell our products globally to retail and OEM customers. We continue to expand our retail customer base
to new geographic regions as well as to outlets such as mobile storefronts, supermarkets and drug stores. We also
sell directly and through distributors to OEM customers. These OEM customers either bundle or embed our
memory solutions with products such as mobile phones, digital cameras, gaming devices, computers and GPS
devices, or resell our memory solutions under their brand into retail channels. This strategy allows us to leverage
the market position, geographic footprint and brand strength of our customers to achieve broad market
penetration for our products.
Our Products
Our products are sold in a wide variety of form factors and include the following:
•Removable Cards. Our removable data storage solutions are available in a variety of consumer form
factors. For example, our ultra-small microSD removable cards, available in capacities up to
32 gigabytes, are designed for use in mobile phones. Our CompactFlash removable cards, available in
capacities up to 128 gigabytes, are well-suited for a range of consumer applications, including digital
cameras. Our professional products include the SanDisk Ultra®and SanDisk Extreme®product lines
which are designed for additional performance and reliability.
•Embedded Products. Our embedded products include our iNAND™ embedded flash product line, with
capacities up to 64 gigabytes, which is designed to respond to the increasing demand for embedded
storage for mobile phones, tablets, eReaders and other portable devices. We also offer high-capacity
SSDs targeted for the personal computing and server markets in capacities up to 256 gigabytes.
•USB Drives. Our Cruzer®line of USB Flash Drives, or UFDs, are used in the computing and consumer
markets, are available in capacities up to 64 gigabytes, are highly-reliable and are designed for high-
performance. Our Cruzer products provide the user with the ability to carry files and application
software on a portable USB drive. Our Professional and Enterprise line of UFDs are geared towards the
corporate user and are specifically designed to support secure and authorized access to corporate
information.
•Digital Media Players. Sansa®is our branded line of flash-based digital media players for the digital
audio and video player market. Many of our Sansa models offer a removable card slot for storage
capacity expansion and easy transportability of content between devices. Features within our Sansa line
of products include FM radio, voice recording and support for a variety of audio and video download
and subscription services. Sansa media players are available in capacities up to 16 gigabytes. We also
sell slotMusic™and slotRadio™ products that greatly simplify music content availability for
consumers.
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