Sandisk Followup

Sandisk is gettin another nice bounce today falling the 5%+ pop yesterday. Maybe this is just short correction - I don't know - but it was nice to see this commentary on the flip side of the Oppenheimer Analyst from Merrill Lynch (reuters is the news source):

"A new venture between Intel Corp. and Micron Technology Inc.
to make memory chips for consumer devices will
not hurt rivals because demand will be stronger than
expected, Merrill Lynch said on Tuesday.
Merrill also upgraded Micron to "buy" the day after the
company announced the $2.4 billion venture to make
memory chips used in gadgets like digital cameras and
music players. By 2007, the venture would produce up to 10 percent of the world's supply of the memory chips -- known as NAND flash -- but demand for them would keep pace with or exceed supply, due in part to their anticipated use in laptop computers, Merrill said.
"Our new demand analysis clearly suggests that this will not lead to oversupply in NAND," Merrill analysts said in a research note. "Rather, NAND could easily be in shortage if new demand from new applications such as notebook PCs soaks up all capacity increases."
Micron shares rose 36 cents, or 2.5 percent, to $14.56 in afternoon Nasdaq trading. Intel shares were up 76 cents, or 3 percent, at $26.01.
News of the deal sent shares of Asian tumbling on concerns that increased competition could trigger a collapse of the fast-growing NAND flash market.
Shares of SanDisk Corp. , a U.S.-based memory maker whose shares fell 16 percent on Monday, rebounded somewhat on Tuesday, rising $2.55, or 5.4 percent, to $49.39.
Merrill said the Intel-Micron deal should not hurt other memory makers. It raised its forecast for NAND sales to $16 billion from $13 billion for 2006 and to $18 billion from $15 billion for 2007. One sign of strong demand also came on Monday when Apple Computer Inc. said it would prepay $1.25 billion to secure a long-term supply of memory used in its iPod music players. It struck contracts with five memory companies, including Intel and Micron."

I think what the article is alluding to is the possibility that Apple might make a new flash based laptop / portable computer that takes computing to a new degree of both beauty and elegance (think really really thin.) I don't know if Flash provides enough performance for this currently - but maybe it you install enough memory into the system - (re: 1-2Gig or more) the performance advantage will help to offset the effects of the slower hard drive access if instead Flash was used as the storage source (with Flash sizes quickly approaching 5-10 gigs - you can imagine the possibilities).

Best Regards,

BG