Memory card prices slashed by 65 per cent in 12 months

By Matthew Henry

CALIFORNIA, USA: High capacity memory cards for electronics devices are becoming significantly cheaper for consumers, according to figures released today by SanDisk, with the price-per-megabyte suffering a whopping 65 per cent decline in the year to July.

SanDisk Corporation, the world’s largest supplier of flash memory cards, highlighted the price erosion as part of its second-quarter earnings report, which revealed a 15 per cent year-on-year jump in second-quarter revenue to $827 million for the company.

The average retail flash memory card capacity in the second quarter 2007 was 1475 megabytes – up 95 per cent from the same period in 2006 and up 20 per cent over the first quarter this year.

The total megabytes of flash memory sold by the company increased 217 per cent over the corresponding period in 2006, revealing growing demand for high-capacity cards for high resolution digital still cameras, mobile phones, portable audio players and other flash memory devices.

SanDisk chairman and CEO, Eli Harari, said demand for flash memory cards is strong and will continue to be so in the second half of 2007.

“Demand for our products in the retail channel recovered nicely in the second quarter, resulting in record megabyte sales,” said Harari.

“In particular, SanDisk’s growing strength in Europe and other international markets doubled our international unit sales compared to last year.

“The flurry of new flash memory enabled, highly innovative consumer and mobile products coming from our customers, our competitors, and ourselves, we believe, will fuel strong demand for our products in the second half of 2007 and in 2008.”

SanDisk is releasing products to meet the growing demand for affordable high-capacity, high-performance cards, such as its 6GB and 8GB microSDHC cards and 4GB Memory Stick Micro for mobile phones.

The company is also expanding into the PC market with its 32GB and 64GB solid state drives (SSD), which replace conventional hard disk drives in mobile PCs with flash memory for faster performance and better durability.

Harari said product gross margins stabilised despite substantial price reductions in the second quarter.

The company expects gross margins to improve gradually in the second half of the year, driven by more moderate price declines resulting from an expected improvement in the balance between demand and supply, declining manufacturing costs and strength in its income from royalties.

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