SanDisk Warns of Weak Profits on Poor Demand for Flash Storage

From DailyTech: SanDisk is one of the biggest companies in the flash storage market. That doesn't mean the company is doing well though, as it has warned that demand is weak and an overabundance of supply on the market is harming its profits. According to SanDisk, demand has tapered with key customers as they scale back orders.

The scaling back of orders seems out of tune with the booming smartphone and tablet markets, but only a few devices are responsible for the huge demand such as the Apple iPhone and iPad. SanDisk's announcement of weak demand and an oversupply sent its shares down 7% in after market trading.

"Anybody who is not a Samsung or an Apple is burning through some (mobile) handset inventory," RBC Capital Markets analyst Doug Freedman said.

"Until we get the PC market, tablet market and handset market back buying, we'll see an oversupply situation."

SanDisk isn't alone in seeing a very bleak outlook for flash memory today; many of its closest competitors are in the same boat. Last month, Micron Technology warned that it was facing low prices and posted a larger loss than expected. Micron recently appointed a new CEO after the tragic death of previous CEO Steven Appleton. The biggest chipmaker in Japan, Toshiba, also recorded a drop in quarterly sales thanks to lower price memory chips.

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