Bloggers, pundits and broadcasters assault us daily with hundreds of views on who is winning the “phone and tablet wars.” The phone war is Apple (AAPL) /iPhone versus Google (GOOG)/Samsung (SSNLF). The tablet war is Apple versus Amazon (AMZN)/Kindle.
Trying to digest all that analysis is exhausting and dangerous to the health of your wealth.
Forget about picking a winner. Instead, focus on the supplier to all the device makers, SanDisk (SNDK). Technically, SanDisk NAND flash memory chips may not be in all devices — they are in many — but SanDisk’s royalty technology is almost everywhere. Last quarter, SanDisk’s revenue grew 43% growth to almost $1.5 billion as memory chip prices bounced back.
More flash memory
Growth is not just coming from devices as we know them but devices that are changing. More and more phones and tablets round the world are using removable SD cards – guess what SD stands for? More and more laptops use flash memory rather than hard drives. More and more enterprise servers and storage devices are using flash memory. SanDisk just spent $300 million or so acquiring a company that serves this enterprise market.
Historically the memory chip market has ups and downs as supply outpaces demand and prices fall – often very quickly. This has been less and less the case for NAND flash and prices for SD products have been rising. Another concern has been the cost of new fabs — chip factories. SanDisk just cut a deal with Toshiba to jointly build a $4 billion dollar fab, part of their joint venture that has been up and running for several years.
But the real story is growth in personal devices.