SanDisk 2012 Annual Report Download - page 110

off. NAND flash memory is the current mainstream technology for mass data storage applications and is used for
embedded and removable data storage. NAND flash memory is characterized by fast write speeds and high
capacities. The NAND flash memory industry has been characterized by rapid technology transitions, which have
reduced the cost per bit by increasing the density of the memory chips on the wafer. As cost and price per bit have
decreased, demand has grown for NAND flash memory in a wide variety of devices and applications.
Our Strategy
In order to remain an industry-leading supplier of NAND flash storage solutions and to develop large scale
markets for NAND flash-based storage products, we strive to:
•Create industry-leading storage solutions by leveraging our innovative technology. We have a deep
understanding of the technology used in the design, manufacture and operation of NAND flash
memory and have invented many of the key technologies deployed in the NAND flash industry. We
continue to develop advanced generations of NAND flash technology with increased memory density
and capacity. In parallel with our NAND scaling efforts, we continue to invest in future alternative
technologies that may be viable alternatives to our current NAND flash technology when it can no
longer scale at a sufficient rate, or at all. In addition, we continue to invest in other technologies, such
as our proprietary controllers, firmware and software that manage the NAND flash memory.
•Maintain cost leadership, leverage scale and drive operational excellence. We believe the markets for
flash storage are generally price elastic, meaning that a decrease in the price per gigabyte results in
increased demand for higher capacities and the emergence of new applications for flash storage. As a
result, we strive to continuously reduce the cost of NAND flash memory in order to enable us to
profitably grow our business, supply a diverse set of customers and channels, and continue to grow our
markets. We have invested heavily in a vertically integrated business model, which includes our
investments in high volume, state-of-the-art NAND flash manufacturing facilities in Japan through our
ventures with Toshiba and our in-house assembly and test facility in Shanghai, China in order to reduce
the costs of producing our products, increase our ability to control the quality of our products and speed
delivery to our customers. We will continue to leverage our vertical integration and invest in additional
NAND flash memory fabrication capacity in order to produce leading-edge, high-quality, low-cost
products that our customers can count on to store and gain reliable access to their data.
•Drive profitable growth across diversified markets, customers and channels. We create new markets
for NAND flash memory through our design and development of NAND flash solutions that are
catered to specific requirements in the end markets we serve. We continue to expand our retail
customer base to new geographic regions and outlets, and we continue to achieve design wins from our
current and new OEM customers by offering leading-edge NAND flash storage solutions. In order to
maximize the market penetration of our products, we are also expanding our distribution channels to
better reach small and medium business customers.
Our Products
Our products are sold in a wide variety of form factors, capacities and performance levels, and include the
following:
•Removable Cards. Our removable cards are used in a variety of applications and consumer devices.
Our CompactFlash®and Secure Digital, or SD, removable cards are primarily used in digital cameras
and camcorders. Our ultra-small microSD removable cards are designed primarily for use in mobile
phones. We offer removable cards with increasing levels of performance and reliability through our
SanDisk Ultra®, SanDisk Extreme®and SanDisk Extreme PRO®product lines.
•Embedded Products. Our embedded products are designed to meet the increasing demand for
embedded storage for mobile phones, tablets and other portable devices. Our embedded products
include our iNAND™ embedded flash product line, our multi-chip packages, or MCP, which combine
NAND and mobile DRAM in an integrated package, and other embedded solutions.
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