SanDisk 2014 Annual Report Download - page 88

other high-value solutions. However, our ability to succeed in the SSD or other high-value solutions
markets is subject to various risks and uncertainties, including, among other things:
• we may be unable to successfully develop or qualify solutions that meet our customers’
requirements, and even if we do, we cannot guarantee that customers will adopt our solutions;
• designing and qualifying products in the market for SSDs or other high-value solutions will require
greater investments and customization than our traditional products, which results in longer
development cycles and higher costs;
• the complexity and longer development cycles required for high-value solutions increase the risk of
development delays that can result in missing customer qualification cycles and other market
opportunities;
• due to longer customer product cycles and end-of-life product support requirements in SSDs and
other high-value solutions, we may be unable to transition customers to our leading-edge products
in a timely manner, or at all, which would prevent us from achieving the full cost advantage of new
technology transitions, we may be unable to adequately supply products that utilize older memory
technology nodes, or, in supplying the older memory technology nodes to customers for high-value
solutions, we may not have sufficient supply of the newer memory technology nodes to meet the
demand requirements of other customers;
• some customers have been developing and may continue to develop their own solutions, which
could reduce demand for our high value system-level solutions, including SSDs, while potentially
increasing demand for our component level products, which could harm our revenue and gross
margins;
• we may transition fab capacity to new technology nodes too quickly, which could result in
inadequate supply of older memory technology nodes required for certain high-value solutions,
limiting or reducing our revenue or market share;
• products that contain our leading-edge technologies, whether based on 2D NAND or our
alternative 3D NAND or 3D ReRAM technologies, may be unable to meet the performance
requirements of high-value solutions or to compete effectively with products from our competitors,
which would inhibit our ability to succeed in these markets and could impair our growth and
profitability prospects;
• we may be unable to reap the expected benefits of our recently completed and pending acquisitions,
many of which relate to the high-value solutions space;
• SSDs and other high-value solutions require more software than our traditional products, therefore
we must continue to develop software expertise;
• SSDs and other high-value solutions require more complex controllers than our traditional
products, and we may be unable to develop or source controllers that meet the performance
requirements of these solutions;
• SSDs and other high-value solutions incorporate unique parts, and if there is lower than expected
demand, we may be unable to incorporate these unique parts in other products;
• SSDs and other high-value solutions require longer production cycle times due to, among other
things, more complex assembly and testing to produce a finished product, as well as customer
requirements for consigned inventory and increased use of hubs for order fulfillment, which could
lead to higher levels and cost of inventory; and
• SSDs and other high-value solutions require different go-to-market strategies compared to our
historical consumer and mobile products, which could increase our operating expenses, and we may
be unable to build an effective sales and marketing operation to sell our high-value solutions.
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