Price erosion: ".....average selling price per gigabyte for product revenues declined 70% in the fourth quarter of fiscal year 2008 as compared to the same period of fiscal year 2007, and declined 62% in fiscal year 2008 compared to fiscal year 2007. The price decline was especially aggressive in the second half of fiscal year 2008, with sequential price declines of 30% in the third quarter and 28% in the fourth quarter. Price declines have exceeded cost declines in each of the last three fiscal years, resulting in negative product gross margin in fiscal year 2008."
Legal actions: SanDisk's 18 material legal actions listed are well covered in other press.
Wafer supply: "The majority of our memory is supplied from the flash ventures with Toshiba. ......We also purchase non-captive NAND memory supply primarily from Samsung and Hynix, and source our 3D one-time programmable, or OTP, memory on a foundry basis at TSMC. We are guaranteed a certain amount of the total output from Samsung and Hynix, but we are not obligated to use the guaranteed supply until we give them an order for future purchases. Our controller wafers are currently supplied by SMIC, TSMC, Tower, and UMC."
Test and assembly: "We sort and test our wafers at Toshiba in Yokkaichi, Japan, and Ardentec Corporation in Taiwan. Our flash memory products are assembled in both our in-house assembly and test facility in Shanghai, China, and through our network of contract manufacturers, including STATS ChipPAC Ltd., or STATS ChipPAC, in China, and Siliconware Precision Industries Co., Ltd., or SPIL, in Taiwan. Our packaged memory final test, card assembly and card test is performed at our in-house facility and at subcontractors such as SPIL and United Test and Assembly Center Ltd., in Taiwan, and Beautiful Enterprise Co., Ltd., Flextronics International Ltd., or Flextronics, Global Brands Manufacture Ltd. and STATS ChipPAC, in China."