Falling prices in the Flash Memory sector have hit manufacturer SanDisk hard in 2008 – their share price has dropped over 50% in the last six months and it looks like a takeover big from Samsung is on the cards. Samsung’s official comment is “We are looking at various opportunities regarding SanDisk, but nothing has been decided yet”, but with the company paying SanDisk more than US$350 million per year in licensing fees an acquisition would represent a big saving for Samsung, in addition to dramatically increasing their production capacity at a time when economies of scale are all-important in the memory sector.
Toshiba, it seems, could be a thorn in Samsung’s side though. Toshiba lag well behind Samsung in production capacity and wouldn’t like their rival to pull even further ahead, so a spoiler bid could be on the cards, Reuters reports.
The impact on consumers is hard to predict at this stage. Tosh buying SanDisk could help competition and lead to chip prices falling even further. On the other hand a Samsung acquisition would consolidate even more power in the Korean firm’s hands and might put them in to a position to start dictating prices to the market. We’ll have to wait and see.