Flash memory prices doubled in 2009

The price of flash memory has doubled over the past four months, according to SanDisk chief executive Eli Harari.

Flash memory prices doubled in 2009

Harari claims 2009 could turn out to be “significantly better” than anticipated at the start of the year as big cutbacks in flash memory production bring balance back to an industry stung by oversupply. The cost of flash memory has risen to more than $2 (£1.28) per gigabyte.

“After the shock of the fourth quarter, our balance sheet is much better,” Harari claims. “This year could turn out to be significantly better than what we thought at the beginning of the year.”

SanDisk says that a recent sale of operations to Toshiba bolstered cash to fuel operations. The company has also substantially cut operating expenses, leaving it in solid shape.

“I feel the company is headed in the right direction,” says Harari, a physicist and co-founder of the company. “I feel as good now as I’ve felt at any time in the last three or four years.”

As a result, the CEO claims SanDisk has no immediate need to issue new shares to raise capital, a plan it had suggested in February.

“In January, we didn’t know if we were going into a 2009-2010 winter, if you will. In that case you want to make sure that you are well capitalised,” he says. “The situation now is much, much better. The pressure for financing is definitely subsided.”

“At this stage there is no plan, but I’m not saying that it’s off the table.”

SanDisk is the biggest maker of flash memory cards used in digital cameras and other electronic devices, and 60% of the company’s business is in retail.

With consumers and corporations alike still spending carefully, many tech executives have said that visibility is tough for the rest of the year.

Harari is “cautiously optimistic” and says consumer demand has been stronger than expected. “In the consumer space, demand has been remarkably solid, [although] I wouldn’t say stellar,” he says.

Harari says mobile phones are the main engine for growth and potentially the biggest future vehicle for flash memory.

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