SanDisk Buying Msystems: What it Portends For the Future - Fiscal Details
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The acquisition valued Msystems at 1.55 billion dollars. Under the terms of the deal, each share of Msystems will be converted to roughly 0.76 SanDisk shares. This is estimated to be 26 percent above the trading value of Msystems throughout the month of July. As of July 30, the deal valued each Msystem share at $36 per share. SanDisk's chief operating officer, Sanjay Mehrotra, was quoted by Reuters as saying he considered the acquisition as a once in a lifetime occurrence and that they intended to keep the Msystems brand based in Israel. "Such complimentary strengths (as found with both companies) are frankly quite hard to come by," according to Mehrotra. SanDisk is currently valued at over nine billion dollars.
Flash Memory Everywhere
Flash memory technology was pioneered by SanDisk in the 80s. The industry has grown and thrived. With companies such as Kingston, SIS and even AMD getting into the act, now flash memory is the storage technology for cell phones, handheld MP3 players, flash drives (of course), and memory cards for digital cameras. Samsung is even planning to build laptops with flash storage systems (and marketers are cringing at the estimated final prices).
SanDisk have made a name for itself in consumer products that depend on flash memory as their storage systems. Their current product lineup includes the new Sansa e280 , which is the biggest flash-based MP3 player at 8 GB. The company also creates secure flash drives with fingerprint identification, and is well known for its award-winning SanDisk Extreme IV Compact flash cards, which are the fastest storage cards in the world (and aimed at photographers). SanDisk also supplies memory cards for mobile phones and other mobile devices. In its own words "SanDisk Corporation is the world's largest supplier of flash data storage card products, designs, manufactures and markets industry-standard, solid-state data, digital imaging and audio storage products using its patented, high-density flash memory and controller technology."
These are just a few of SanDisk's products. The company is currently betting a large portion of its future earnings on its NAND flash memory. Its NAND flash memory (a new form of flash technology) is being developed and manufactured in collaboration with Toshiba. NAND technology is fast gaining ground and getting widespread use in digital appliances, some MP3 players and certain types of memory cards.
The NAND flash storage devices come in wafer form; production in SanDisk's Fab 4 facility in Japan is expected to reach 2500 units per month when it goes online late in 2007, and production is projected to reach 67,500 wafers monthly by late 2008. Meanwhile, SanDisk intends to ramp up its Fab 3 (which went live in 2005) facility, where it currently manufactures its NAND flash memory wafers. What does Msystems have to offer SanDisk going forward?
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