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DOJ To Open Price-Fixing Query Into NAND Memory Market
Ep0xi writes "Following on previous investigations into price fixing in the SRAM and DRAM memory market, the US Department of Justice has begun an antitrust investigation of the NAND flash-memory industry.' Edwin Mok, a financial analyst at Needham, added that the NAND market was competitive. Mok, who covers SanDisk, said he would be surprised if the company did anything wrong. 'I don't see a huge impact on the company or the stock,' he said. SanDisk shares were up $1.30, or 2.6 percent, to $51.29 on Friday. But [another industry analyst] said NAND prices showed an unusual 5 percent increase in the second quarter and are expected to climb an additional 8 percent in the third quarter, before declining again in the fourth quarter. Demand remains strong.'"
I'll preface this by saying that I own stock in Sandisk (SNDK).
I am not selling SNDK at this point, because I find any insinuation that they are involved in price fixing questionable. The price per gigabyte for flash memory has been dropping significantly quarter after quarter, though they do note that prices have increased slightly the last two quarters. While I'm not an analyst by any means, I don't see this as a significant or indicative trend and unless they have incriminating emails passing around between CEOs, I'm sure these increases could be attributed to a number of things such as the school year and Christmas coming up (which increases demand) and the recent manufacturing shutdown at a major Samsung plant (which reduced production).
You also have Apple talking about new laptops down the pipeline that will potentially use a lot of flash and a flood of new hardware such as the new fat-wide ipod and the iphone which increase need for flash storage. So you have vastly increasing demand for the product with an industry that is still trying to ramp up production to keep up. I don't see how a slight price increase over two quarters would be a surprise?