Flash Memory Group 7 Writeup

Free cash flows of the project for next five years can be calculated by adding depreciation values and subtracting changes in working capital from net income. In 2010, there will be a cash outflow of $2.2 million as capital expenditure. In 2011, there will be an additional one time cash outflow of $300,000 as an advertising expense. Using net free cash flow values for next five years and discount rate for discounting, NPV for the project comes out to be $2907, 100. The rate of return at which net present value becomes zero i.e.

Before moving forward to compute the present value of these cash flows, a terminal value is required to forecast the long term value of the company after 5 years. . Following formula is used to calculate the terminal value.

From pioneering in memory DRAM semicon to exiting the low-margin DRAM market – Intel was primarily a Memory semicon manufacturer before it entered microprocessors in 1980s. Its added value in the memory industry in 1970s was very high because of its advances in MOS process to produce DRAM. However, with increase in competition and the advancement of Japanese conglomerates in the memory industry Intel was forced to play a chasing game to improve performance and reduce costs. In the mid-1980s, Intel’s market share in the core memory business was <1%, however it was continuing to invest in this domain. They finally exited the DRAM market, which was more of a cash burner with low-margins.

By the early 1980, Intel’s total share in DRAM was barely 1% and manufacturing was restricted to one fab out of Intel’s eight fab, where the Japanese semiconductor companies had captured nearly half of the world memory market. There are several factors that forced Intel to exit the DRAM market, those are the same lessons learned.

The semiconductor market in business communication is expected to have a compound average growth rate of almost 18% over the next five years. Our current market share within this segment is slightly more than 7%, and management wants to see the share of the market double by the end of the century. Figure 1 represents the projected growth of the semiconductor market in business communication and Mitel Semiconductor over the next five years.

What is the fastest type of storage, how fast does it work, and where is located?

As Pleasure Craft Inc. has publicly held debt; we determined the cost of debt to be the yield to maturity on the outstanding debt on the outboard motor project, so using a financial calculator we establish the YTM to be equal to 2.4827%. Because this is a Semi- annual compounding, rd = YTM * 2 = 4.9654%; for the cost of equity (Rf + β (Rm - Rf)): 12.8420%. The WACC is the discount rate of the projects WACC = rd * (1- Td) * D/V + (re * E/ V) = 4.9654% (1- 35%) * 30% + 12.8420% * 70% = 0.0996, so the WACC is determined to be 9.96% for outboard motors project. The NPV of this project is positive and equal to $35,630,973.63, the IRR for the outboard motors has calculated to be 8%. From these calculation we can know the project’s beta is lower than project front- end loader project and the risk is lower also; from the decision rule the NPV > 0 and IRR > R, so we choose the outboard motor project.

Hewlett Packard (HP) decided to produce 1.3-inch disk drives to become the market leader in a new market and increase HP’s revenue. Although the market for 1.3-inch disk drives was still unclear and still developing, HP decided to organize a special team to develop this new product. This group was multi-talented, with the best engineers from every department in the company. The group also had many priorities for the company. However, things didn’t develop as the Kittyhawk team expected. They failed to sell the new product to the customer they planned. Even though some new customers were interested in this

As sales of Flash Memory Inc. (Flash) increases rapidly in the first few months of 2010, additional working capital is required to ensure smooth operations and maintain their current growth rate. However, Flash currently has almost reached its notes payable limit of 70% accounts receivables with its current commercial bank and thus, need to look for various alternative financing means to provide the required amount of funds it needs to finance its forecasted sales for year 2010 onwards. This report is written to provide an insight to Flash’s financial position for the following 3 years (2010 till 2012) through the use of pro-forma income statement and balance sheet. For Flash to be able to keep up

In  the  next  section  we  will  analyze  the  level  of  competition  within  memory  industry  based  on  Porter’s   model, Samsung's competitive advantage and its sustainability considering the current market situation.  3. Analysis:  Considering  Porter’s  model  as  a  framework  to  analyze  the  level  of  competition  within  DRAM  memory  business,  the  threat  of   new   entrant  is  high  compared  to  the  threat  of  substitutes  and  established  rivals in horizontal competition.  If  we  look  at  rivalry within  the DRAM industry between established  players,  Samsung  has  a clear  advantage  over  its  competitors.  Samsung  is  the   market  leader  in  DRAM  memory  business. It  has  a wide  range of products and its products has a higher brand value.  Threat  of  new  entrants  is  high  as  Chinese  competitors  have  easier  access  to  large  pool  of  local  engineering talent and have a growing market  for these DRAM chips. The  government is also  providing all  sorts  of  assistance, like subsidized  land, for  the initial setup. Samsung has several options to  deter  the entry  of  new  Chinese  competitors.  One  option  Samsung  have  is  to  continue  to  explore  and  increase  market  shares  of  flash  memory  markets  which  is  a  new  and  growing  market.  Samsung  can  also  take  advantage  by  lowering  the  price  of  DRAM  chips.   This  would  force   a  price  war  and  drive new

In an attempt to increase the market share with in the digital memory division (DMD) of Hewlett-Packard, management decided to analyze the potential profitability of developing a 1.3” drive that would surpass the current technology within this continually growing market. Teams comprised of the best and brightest employees, within the organization, were tasked with developing this new product from the ground up. After successfully delivering on their goals, the new drive was ready for the customer. Initial sales were one tenth of the prescribed figures and the 1.3” drive was scraped, even though it was a far superior product to the current technology available at the time of introduction. Throughout this case study

The company, although respected, has come under fire for not using their research for product improvements or customer needs. BOLDFlash flaws have become apparent with the release of latest product, the A23-B flash drive. BOLDFlash technical communication practice is affecting product quality, delivery timeliness, efficiency, costs, and customer satisfaction. The company went through major reorganization of divisions, experiencing rapid sale growth, high productivity of products, and fast pace development of new products (Beer & Shelton, 2012).

And especially large established firms face this dilemma; they have grown excellent at managing operational efficiencies and building customer loyalty. But will they be able to take wise decision when it comes to radical innovations and face the chaos associated with commercialization of breakthroughs. Subsequently, some companies actually made it possible, for example IBM, with a new generation of communication chips, describing an innovation aimed to increase switching speeds and reduce

For instance, there is an example that attempts to put RRAM into automotive manufacture, is Crossbar. Crossbar Inc., also known as the leader of the research in RRAM, shows competitive advantages in the memory market and its relative applications can put it to good use in a plenty of fields and areas. Compared to NAND flash memory, Crossbar RRAM technology reduces reading delay and increases the speed of read-in. Moreover, unlike NAND flash memory, it is unrestricted to establish a memory array in large modules as well as be independently erased in atomic order. This brand-new storage framework simplifies the memory controller, and it provides customer bet-ter experience of read-in, lower power dissipation, as well as longer life cycle of saving data.

In the component market, integrated circuit technology is threat of new entrants. The growth of integrated circuit technology makes existing component market shrink. EPD has taken aggressive moves to protect its market share from competitors and new entrants. Therefore, in existing market, EPD needs a cost reduction effort more and change their business model into low-margin high-volume business. It means that they should change their evaluation system; the plant should maintain 40% of gross margin. Additionally, they need to introduce new products into market to acquire new source of revenue. EPD has not built the clear strategies and shared them with employees.