) plans to announce its Q2 2011 earnings results tomorrow. For the
quarter, we are keeping a close eye on growth in the solid state
drives (SSDs) market, which is being supported by the rising
popularity of tablets and the increased adoption of SSDs in PCs as
well as enterprises storage solutions. In the past, mobile phone
flash cards have been the largest value driver for SanDisk making
up more than 50% of our
$50.60 Trefis price estimate for SanDisk stock
. SanDisk primary competitors include firms like Hynix (
), Micron (
), Samsung (LI:SAMS), STMicroelectronics (
), Toshiba (
) and IM Flash (a joint venture of Micron and Intel).
Growing Smartphone Market Bodes Well for SanDisk
The fact that mobile phone flash card sales made up 50% of
SanDisk's revenues in 2010 makes the mobile market the most
important aspect to look at in SanDisk's upcoming Q2 11
earnings. In its Q1 11 earnings SanDisk reported nearly 40%
growth in total unit sales of mobile products on a year-over-year
basis, and we expect the momentum to continue in Q2 as well. If
continued growth in smartphone market is something to go by, signs
are good for SanDisk's mobile product lineup.
Solid State Drives Gaining Popularity
The demand for SSDs has been on the rise with the increased
adoption of tablets (which use SSD storage) among consumers.
SanDisk reported strong tablet customer activity in Q1'11 with
rising demand for 16 gigabyte and higher capacities of its embedded
solutions for the market, which we expect to continue in
Q2'11. With the recent acquisition of Pliant Technologies,
SanDisk is now also targeting the enterprise storage solutions
market where SSDs are quickly gaining popularity.
According to research firm iSuppli, SSD revenue in
2011 will reach $4.4 billion - up 91
from $2.3 billion in 2010. By 2014, iSuppli expects SSD
revenue to reach $7 billion. iSuppli predicts that the
industry's hottest segment in 2011 will be SSDs for consumer usage
as shipments of SSD-fitted high-end notebooks skyrocket.
The enterprise SSDs will be the other growth segment in 2011 with
firms increasingly employing flash storage to overcome performance
Despite this growth, SSD demand is still miniscule compared to
demand for hard disk drives and thereby offer tremendous
growth potential to SanDisk.
See our full analysis of SanDisk.