SanDisk

Source: Manufacturing Digital

Date :12/12/2007 08:35:55

ExecUS speaks to Sanjay Mehrotra, co-founder, President and COO of SanDisk, the global leader in flash memory solutions, about helping to bring about the digital revolution

Written by Sam Wright and Produced by Kristin Hurley

Do you own a digital camera? The likely answer is yes. Around 65 percent of American households have at least one, while this year around 122 million more have been shipped to stores. And if you don’t, the chances are you have an mp3 player, a USB flash drive or a multimedia-enabled mobile phone, all technologies that SanDisk, through its development of flash memory, have helped to create.

Leading the way

Familiarity can often lead to oversight, but it’s worth taking a closer look at SanDisk. After all, the company is a little bit different. Not many can claim to have had such a massive impact on the fickle world of consumer electronics, let in alone in four different areas. Flash, with its low cost, high capacity and enormous flexibility has been right at the heart of the web 2.0 revolution; capturing and uploading images, video and music has never been easier. And after all, magazines such as this would look very different without flash technology.

Founded in 1988 by Eli Harari, Jack Yuan and Sanjay Mehrotra, California’s SanDisk Corporation (formally SunDisk) has been at the forefront of the industry since its inception. It currently has almost 800 issued U.S. patents, and more than 400 foreign patents, and is the only company worldwide that has the rights to both manufacture and sell every major flash card format (including CompactFlash, SD, miniSD, microSD, MultiMediaCard) and USB drives.

After graduating from the University of California in 1980, Mr. Mehrotra was involved in non-volatile memory design, technology and management for eight years before starting SanDisk. And right from the very beginning the company has known the potential for its products.

The power of foresight

“Dr. Eli Harari, SanDisk’s chairman, chief executive officer and founder,” he says, “had the vision at the time that flash memory technology could be used to develop products which would create new markets or enable the growth of large consumer electronics markets such as digital cameras, mobile phones, and portable computers. Remember, this is way back in 1988 before things such as digital cameras were household items, before they were even out there.”

This vision led to the company working in the early 90s with industry heavyweights such as Canon, Kodak and Nikon to push flash memory as a convenient and cost-effective digital imaging solution, a move that Mr. Mehrotra says ‘absolutely helped create the modern digital camera market.’

Not just content with this, the company quickly saw the potential for other applications. Indeed, this seems to be the secret of the company’s success; having absolute confidence in the vision for their products and technology and being open to new applications.

“For example, today,” he says, “phones are not just a communication device. They’re your multimedia centre-they’ve got music, they’ve got pictures, they’ve got video, email, maps and GPS. And all of this needs storage. In fact, today mobile phones represent the largest growth category for SanDisk products.”

“Flash has really become a disruptive technology,” he points out, “disruptive in the sense that it has absolutely changed the status quo by giving consumers a new experience and a new ease of use.”

This ‘disruption’ has gathered at an astonishing pace, even for the notoriously quick-moving technology sector. In 2006, SanDisk made $3.3 billion in total revenue.

“And don’t forget,” says Mr. Mehrotra, “2003 was the first year that we reached $1 billion in revenue.”

Changing focus

Much of this is due to a shift in emphasis at the company. Back in 1999, SanDisk made the decision to spread its operations from OEM (Original Equipment Manufacturing) over into retail.

The move has been an unqualified success, with around 60-70 percent of its business now in the retail side of the brand. This, combined with an aggressive policy of expansion outside North America, has led to record results. In the third quarter that ended in September, the company sold a record 42 million of its mobile phone products; news that Chairman Eli Harari said reinforced ‘the enormous global opportunity which is unfolding.’ But all this hasn’t stopped SanDisk from again stepping out into the emerging markets that have been behind its drive forward.

“As flash memory capacities increase and costs continue to decrease, it spurs the development of new applications that benefit from the advantages that flash memory provides such as portability, removability, greater durability, improved battery life and better system performance. A good example is the Solid State Drive (SSD) market, which is beginning to replace traditional hard disk drives in notebook computers. According to Gartner, a market research firm, by 2010 nearly 20 percent of notebook PCs will have solid state flash drives, says Mr. Mehrotra. SanDisk already supplies these products to Dell. In addition, IBM uses the SanDisk SSD for its blade servers for improved reliability.

As he points out, “We are excited about what we can achieve in the future. Our markets are young and growing rapidly. We are well positioned to drive our future growth.”

Delivering the goods

So what does the future hold for SanDisk? Just how does the company plan to keep up its striking performance? Mr. Mehrotra’s answer is simple:

“The primary focus for us at the moment is execution – to make sure that we continue to strengthen our global leadership, to grow our market share and to maximize our profitability.”

“If you look at our market share, he says, “we are likely to be the market share leader across all geographies.”

“In the US, we have a very strong position as number two in the mp3 market behind Apple, ahead of Sony, Creative and Samsung. Of course, in other businesses such as digital imaging solutions, flash cards for mobiles, and USB flash drives we are market leaders globally. And we have achieved this by continuing to build and invest in the SanDisk brand and supporting it with our leadership in technology and manufacturing.”