In the chart above we forecast the high gross margin for mobile flash memory cards will continue into the future, as the cost improvement achieved is based on technological developments by SanDisk.
Of course, we are concerned that margin compression in the memory products market may be unavoidable, but we tend to agree with the UBS analysts that oversupply concerns may already be priced in.
The higher gross margin forecast for mobile flash memory cards and other SanDisk products has resulted in a large increase in our price estimate for SanDisk.