IDEMA Keynote Address February 17, Sanjay Mehrotra COO, Executive VP

Transcription

1 IDEMA Keynote Address February 17, 2005 Sanjay Mehrotra COO, Executive VP

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3 The Future of Flash MemoryIs Everywhere

4 Product Line Breadth & Depth USB 2.0 Reader Memory Stick PRO SD TransFlash MP3 Players RS-MMC Cruzer Mini Cruzer Titanium MemoryStick xd Cards MiniSD 12-in-1 USB 2.0 Cruzer Micro MS Duo MS PRO Ultra MS PRO Duo Ultra SD Card Adapters CompactFlash Skins MS PRO Duo Ultra CF PC Cards Wireless Cards Extreme CF Extreme SD SPA MMC SANSA SD Wi-Fi 6-in-1

5 Corporate Snapshot Founded: 1988 Public (NASDAQ: SNDK) since November 1995 World s leading supplier of flash memory cards Headquarters: Sunnyvale, CA R&D offices: California, Israel, UK Employees: > 900 Granted patents: > 300 Retail stores worldwide: > 100,000 Invented, co-invented or co-developed U3 TransFlash Memory Stick PRO Memory Card SD Memory Card MultiMediaCard CompactFlash Memory card PCMCIA Memory card

6 Revenues in an Expanding Market $ in Millions $1.08B $1.78B License/ Royalty Product $542M Q1 Q1 Q

7 IP License and Royalties $ in Millions $174M $97M $48M Q1 Q1 Q

8 Vertical Integration Model Finished Product 100K OEM / Retail Fulfillment Memory Technology

9 Flash Storage Ever More Pervasive No longer a one trick pony (Digital Still Cameras) Flash storage branching to new markets: Mobile Handsets USB Flashdrives MP3 players Gaming, Video GPS, etc New class of intelligent/secure flash storage (e.g U3, Medkey, Booklocker etc)

10 NAND Flash $ TAM per Market TAM $B DSC/DVC Mobile Phones USB Drives Digital Audio Other Source: SanDisk Estimates

11 Projected Annual Bit Growth by Market 300% 250% Bit CAGR 200% 150% 100% 50% 0% DSC/DVC Mobile Phones USB Drives Digital Audio Other Total Market Source: SanDisk Estimates

12 Self-Correcting Demand & Supply SanDisk Actual Retail ASP/MB 43% Yearly Decline Tredline 43% Annual ASP/MB Decline Trendline Log Scale 3-4 Quarter Cyclicality 2000Q1 1999Q1 2003Q1 2002Q1 2001Q1 2004Q1 Source: SanDisk

13 Retail Flash Card ASP/MB & Cost/MB 43% Annual ASP/MB Decline Trendline 43% Annual Retail Std Cost/MB Decline Trendline ` Log Scale SanDisk Actual Retail ASP/MB SanDisk Actual Retail Std Cost/MB 2003Q1 2002Q1 2004Q1 Source: SanDisk

14 NAND Technology Leadership Partnership with Toshiba: 5 years and going strong Highly scalable & aggressive NAND Roadmap: 210nm 160nm 130nm 90nm 70nm 55nm MLC combining device scaling with system integration Highest Performance MLC & Binary Flash Competitive die size (cost benefit) Strong IP position

15 Yokkaichi Fab III Update $ 2.1B+ total investment shared equally between SanDisk & Toshiba Building construction completed ahead of schedule Dedicated to 300mm NAND/MLC fab Two floors of clean room (five floors total) Production start 90nm in 2H 05, 70nm in nm toolset Max wafer out 62,000 w/m (10,000 by end of 2005) Cost parity with 200mm expected mid 2006 Modular capacity expansion

16 NAND Technology Roadmap Source: SanDisk/Toshiba

17 Multi-Level Cell (MLC) Cost Advantage 2 Gbit Samsung Binary NAND 4 Gbit SanDisk MLC NAND SAMSUNG 90nm SANDISK 90nm

18 4 Generations of NAND MLC Experience 160nm 1Gb MLC nm 2Gb MLC nm 4Gb MLC nm 8Gb MLC 2005 Die Size 147mm 2 153mm 2 140mm 2 146mm 2 Max Bit pgm 16 Kbit 32 Kbit 32 Kbit 32 Kbit Max Write 2 MB/s 4 MB/s 5 MB/s 6 MB/s Max Read 18 MB/s 18 MB/s 36 MB/s 60 MB/s

19 Technology Comparisons 70nm 8 Gbit MLC SanDisk-Toshiba 90nm 4 Gbit MLC SanDisk-Toshiba 90nm 2 Gbit Binary Micron Die size 146mm 2 Die size 140mm 2 Die size 143mm 2

20 NAND Technology Roadmap SanDisk/Toshiba Joint Development Roadmap 16G/8G 55nm 8G/4G 70nm 55nm 4G/2G 90nm 70nm 55nm 2G/1G 0.13µ 90nm 70nm 55nm 1G/512M 0.13µ 90nm 70nm 512M/ 256M 0.13µ 90nm 256M/ 128M 0.13µ Source: SanDisk

21 32 GB Flash Card Capacity Roadmap 16 GB 8 GB 4 GB 2 GB CF SD minisd TransFlash 1 GB 512 MB 256 MB Q1 Q1 Q1 Source: SanDisk

22 Packaging Capability From Chip Scale Package to Chip Scale Card TransFlash Chip Scale Packaging: Package Size ~1.2x die size SiP: System in a Package 4 Memory Die Stacking Length 15mm Height 1mm Width 11mm Chip Scale Card: TransFlash Smallest Flash Memory Card Removable/Semi-removable Card size ~ 1.2x die size 4 Memory die stacking

23 New NAND Technologies Continue to Drive Cost/MB Expected Cost/MB in 2007/08 Relative to /08 Source: SanDisk Estimates

24 Card Usage Models Will Change Dramatically As Flash Approaches 1 Cent/MB DSC: 2004; 512MB (reusable) for $ ; 1GB (consumable) for $10 (2 cents/image) USB FlashDrives: 2004; 512MB for $50 (dumb storage) 2009; 10GB for <$100 ( private PC) Handsets: 2004; 128MB (camera, ) for $ ; 4GB (video/audio/games) for <$40 MP3: 2004; 512MB for $100 (fixed capacity) 2009; 1GB (consumable) for $10 (5 cents/song) Notebook PC: 2004; NA 2009; 20GB (instant-on, near zero power) for <$150

25 Market Elasticity Price/MB Drives Average Card Capacity 40% 30% Avg Cap Delta ASP/MB Delta Source: SanDisk 20% 10% 0% -10% -20% -30% -40% 2004Q1 2003Q1 2002Q1 2001Q1 Source: SanDisk

26 Accelerating Card Capacity Growth MB/Unit 1000 Actual SanDisk Retail Average Card Capacity Actual Retail AvgCap 10% Qtr Growth 16 % Qtr Growth Log Scale 16% Qtr Growth % Qtr Growth 20 Show HDD corresponding increase 2004Q1 2003Q1 2002Q1 2001Q1 2000Q1 1999Q1 Source: SanDisk

27 Yearly Bit Growth Trendline: 195% SanDisk Actual Terabyte Shipments 195% Annual Growth Log Scale 1999Q1 2000Q1 2001Q1 2002Q1 2003Q1 2004Q1 Source: SanDisk

28 Technology is Key Rapid technology transitions achieve lower cost: Enable new markets Stable margins despite declining ASP/MB Keep competition at Bay Ship vastly more MB per wafer Six (6) NAND generations in 6 Years ( ): 210nm 160nm 130nm 90nm 70nm 55nm Leadership in MLC Controllers: lowest cost, highest performance, secure

29 NAND Advantages Size & weight Reliability High shock & vibration tolerance Low power consumption Wide temperature range High transfer rates and low latencies Lower fixed cost In 2005 and beyond Lower multi-gigabyte cost

30 In Summary Addressing & creating new growth markets Rapid NAND technology transitions acceleration beyond Moore s Law Manufacturing strategy for capacity, cost and market share Effective IP strategy Still creating, innovating, having fun

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