Toshiba unlikely to make move for SanDisk

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The likely drama between Samsung and SanDisk involves the two companies and the U.S. federal government, but many people have forgotten a company that will be paying close attention to the deal: Toshiba.

Toshiba is currently second in NAND sales behind Samsung, with 28 percent market share in 2008. Toshiba works closely with SanDisk, and that partnership would be ruined assuming Samsung is bought out by SanDisk. Furthermore, SanDisk holds several patents that Toshiba uses in its own flash memory technology.

Bloggers indicated Toshiba should place a bid for SanDisk, but the possible bidding war with Samsung would not be appealing for stockholders.

Analysts warn that Toshiba likely faces more competition from Micron Technology, Numonyx, Hynix Semiconductor, and other smaller companies that will pick away at Toshiba’s market share.

Samsung currently pays around $400 million per year in annual royalty payments for flash memory patents currently owned by SanDisk. Along with acquiring the company’s flash memory technology, it would no longer have to pay millions in royalty rates.

Since it’s unlikely U.S. regulators will let a deal between Samsung and SanDisk take place, and SanDisk executives continue to say the monetary offer is too low, the NAND market will likely remain status quo.

Flash memory is used in mobile phones, MP3 players, digital cameras, and other portable electronics we use – companies are pouring millions into research and development of flash memory, hoping to make lighter and cooler technology able to bump off hard disk drive technology.