On March 26, 2015, SanDisk Corporation announced that the company expects its quarterly revenue to total $1.3 billion USD, a decline from its initial expectation of $1.4-$1.45 billion. As a result, the company’s stock tumbled by 13.4% from premarket trading.
Based in Milpitas, California, SanDisk Corporation specializes in computer storage and memory products distributor. Founded in 1988, the company grew enormously to become a publically traded company with market capitalization in excess of $17 billion USD in February of 2015. After the company’s recent announcement, however, SanDisk’s market value now stands at $14.3 billion USD. However, Forbes suggests that the mass exodus of investors has caused the stock to become oversold, or has an unbalanced value to its true worth. The Relative Strength Index (RSI), a technical analysis indicator measuring fear and panic in a stock trading, identifies an oversold stock as one with an RSI below 30 and which may then be worth buying. SanDisk measured an RSI of 27.5 after announcing its dismal revenue expectations.
The company cited product qualification delays, lower sales of enterprise products, and lower pricing as reasons for declining revenues. Investors are worried since the company’s enterprise products (such as their Solid State Drives [SSDs] and software for larger-scale commercial or industrial network requirements) are some of the company’s central offerings. The company detailed the following risks in their press release: excess/mismatched captive memory output, capacity or inventory may lower selling prices; embedded products and SSDs are experiencing lower demand, ventures into 15-nanometer process technology, X3 NAND memory architecture, 3D NAND technology may be delayed or underperforming, among other detrimental factors.
Just the day before on March 25, SanDisk issued a press release announcing the successful completion of a 48 layer second generation 3D NAND, also called BiCS2. Developed in collaboration with Toshiba, the 3D NAND is a charge trap flash semiconductor memory technology which uses silicon nitride film to store electrons instead of conventional doped polycrystalline silicon. Toshiba uses vertical flash bit strings which increases the number of bits which can fit on the silicon. The new 3D NAND will be put into initial production later in 2015, with commercial production starting in 2016.
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