Cary,
re: Sandisk and "It's different this time" for NAND
Free cash flow is easy enough to look up:
Cash Flow pS 4.72 $
Free Cash Flow pS 3.73 $
si.advfn.com 
It will, IMHO, get better as the year goes on.
As why it is different, I suggest you read this piece on Sandisk:
savolainen.wordpress.com
Here is an excerpt that quotes Eli Harari, the Chair of Sandisk, during the Q&A at their February Investors' Day Conference and a graph from the presentation that Harari gave. While reading the excerpt, recall that currently, leading edge NAND vendors are mostly at 3x, are only now beginning to ramp at 2x, and no one knows yet how to ramp at 1x.
Here is Eli’s math from Investor Day:
“Q: OK very good. And how many new fabs would need to be built then to reach your estimated demand in the out years [2013]? At one point a few years back you were talking about 6 new fabs.
Eli: OK, and don’t hold me to it. To do that math.
Lets say that 1x generation product is between lets say 2.5 and 3 TB per wafer, approximately that- lets say 3 TB per wafer. You have to be really really good to get 3 TB per wafer, and probably use 2 to 3 bits per cell.
That means 30,000 PB in 2013, an incremental 30,000 PB would require another 10 million wafers which is 5 mega-fabs, assuming 1x @ pretty good yields @ 3 bits per cell.
This is the point I was making earlier- that the projected growth in demand requires very substantial new capacity.
The existing capacity is already generating 10,000 PBs- 11,000. So lets say it can go to 30,000 PB. If you want to build another 30,000 you need to have another 5 or so fabs- mega-fabs.
Q: On an average of $8B per fab?
Eli: Roughly.
Q: Roughly, plus maintenance capex. That’s a big investment- a big risk.
Eli: Yes. Somebody told me that a nuclear aircraft carrier cost about $5B. That gives you an idea how big $8 billion is, but as I said, it’s spread over a three year period- investment wise. In any kind of new capacity it would be very likely with Toshiba so our number would be less than that number.
Q: I hope so.
Eli: Me too. [laughter]”
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So far, Toshiba/Sandisk and Samsung have announced new fabs to be built over the next 12 months, and gradually brought up. Micron/Intel (IMFT) has made some noises, but as far as I know, hasn't definitively announced plans for a new fab--we will likely find out more at MU's upcoming CC sometime in the next 2 weeks or so. Hynix has announced an investment total of around $3.5b, but hasn't broken that out as to what will be NAND and what will be DRAM. They are stronger and a more competitive number 2 in DRAM, and it would make sense for them to defend that position rather than try to go up against 3 much stronger and better capitalized competitors in NAND. The other players? There are no others to speak of--Numonyx and Powerchip have a grand total of about 3% of the NAND market (see  Message 26550757 ). I think I can guarantee that there will not be any new players entering the market. Why? First, because of the complexity and cost of NAND manufacturing, and the long lead times of building a fab and bringing up production, even for companies that are experienced in it. Second, because many of the production processes that are currently used are patent protected. Third, because no one currently projects that manufacturing NAND will be possible after the 1x node. Instead, people have been working on post-NAND solutions. That is a story for another post, but I'll just say here that none of these post-NAND solutions have been commercialized yet (or are even close), and that Sandisk has its own post-NAND 3D process that it hopes to bring on line sometime in the 2013-15 time frame. |
