SanDisk CEO Reports Improved Outlook After Disastrous Q4

By Chris Preimesberger  |  Posted 2009-05-19 Print this article Print

SanDisk CEO Eli Harari explains that 2009 could well be significantly better for the NAND flash storage maker than anticipated only five months ago, thanks to major overall cutbacks in NAND flash memory production.

NAND flash storage maker SanDisk, down in the dumps after reporting a $1.9 billion loss in the fourth quarter of 2008, apparently is back on the road to financial black ink.

CEO Eli Harari on May 19 told attendees of the Reuters Global Technology Summit in New York that 2009 could well be "significantly better" for SanDisk than anticipated only five months ago, thanks mainly to cutbacks in NAND flash memory production.

The bulk price for 1GB of NAND flash memory had dropped for the first time to about $1 in January, and manufacturers were swimming in excess stock. In the last four months, however, flash makers have trimmed back production to bring balance back into the industry, and the price has now more than doubled to over $2 per gigabyte.

Despite the price increases, demand remains steady, industry analysts have reported.

SanDisk is the world leader in supplying flash memory cards for digital cameras and handheld devices. But the company, with a market capitalization of $3.24 billion, had suffered for months along with the rest of the flash industry through an oversupply of NAND chips-especially those destined for use in servers and laptops.

SanDisk also received big help from Japanese systems maker and longtime partner Toshiba, which agreed to pay $1 billion to SanDisk in October 2008 in exchange for 30 percent of its NAND flash production.

"After the shock of the fourth quarter, our balance sheet is much better," Harari told Reuters. "This year could turn out to be significantly better than what we thought at the beginning of the year. Consumer demand has been stronger than we expected.

"I feel as good now as I've felt at any time in the last three or four years. The pressure for financing [has] definitely subsided."

Harari, whose company competes mainly against Samsung, Micron Technology and Hynix Semiconductor, said SanDisk has cut operating expenses to aid the balance sheet.

Chris Preimesberger Chris Preimesberger was named Editor-in-Chief of Features & Analysis at eWEEK in November 2011. Previously he served eWEEK as Senior Writer, covering a range of IT sectors that include data center systems, cloud computing, storage, virtualization, green IT, e-discovery and IT governance. His blog, Storage Station, is considered a go-to information source. Chris won a national Folio Award for magazine writing in November 2011 for a cover story on and CEO-founder Marc Benioff, and he has served as a judge for the SIIA Codie Awards since 2005. In previous IT journalism, Chris was a founding editor of both IT Manager's Journal and and was managing editor of Software Development magazine. His diverse resume also includes: sportswriter for the Los Angeles Daily News, covering NCAA and NBA basketball, television critic for the Palo Alto Times Tribune, and Sports Information Director at Stanford University. He has served as a correspondent for The Associated Press, covering Stanford and NCAA tournament basketball, since 1983. He has covered a number of major events, including the 1984 Democratic National Convention, a Presidential press conference at the White House in 1993, the Emmy Awards (three times), two Rose Bowls, the Fiesta Bowl, several NCAA men's and women's basketball tournaments, a Formula One Grand Prix auto race, a heavyweight boxing championship bout (Ali vs. Spinks, 1978), and the 1985 Super Bowl. A 1975 graduate of Pepperdine University in Malibu, Calif., Chris has won more than a dozen regional and national awards for his work. He and his wife, Rebecca, have four children and reside in Redwood City, Calif.Follow on Twitter: editingwhiz

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