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SanDisk says enterprise SSD prospects still strong

The fourth quarter of 2014 was tough for solid-state storage vendor SanDisk. Still, the vendor said its enterprise solid-state drive (SSD) sales increased and it remains on track for $1 billion in enterprise SSD revenue in 2015.

SanDisk warned earlier this month that it would miss its revenue target for the quarter. On Wednesday it said its revenue was $1.735 billion, about $100 million below Wall Street expectations. The downfall came on its retail and client SSD products. SanDisk reported strong enterprise sales although it is still early days for its Fusion-io products and its ULLtraDIMM prospects are dim because of a legal issue.

CEO Sanjay Mehrotra said SanDisk’s enterprise SSD revenue grew last quarter, and doubled for the full year over 2013. He said SAS SSDs still led the way with a big bump in CloudSpeed SATA SSDs as well.

He added that SanDisk has completed its integration of PCIe flash pioneer Fusion-io  and expects an increase in sales of those products. However, revenue is likely to remain lower in SanDisk’s OEM model than it was for Fusion-io before the acquisition.

SanDisk forecasts total revenue of $6.5 billion to $6.8 billion for 2015, but client SSD sales are expected to decline while enterprise revenue increases.

“Enterprise SSDs will certainly achieve $1 billion in revenue for us in 2015, and we’ll continue to grow in that space in the future,” Mehrotra said. “We have previously articulated our goal to be a number one market share leader in enterprise SSDs, and we are well on our way.”

He said SanDisk has the “broadest [flash] portfolio in the business,” with its SSD, PCIe and software products.

SanDisk’s fledgling UltraDIMM products are stalled now due to a lawsuit involving its memory channel storage card supplier Diablo. Netlist, charging that Diablo Technology infringed its patents to develop its chips, has gained a court injunction to stop Diablo from shipping the chips used in SanDisk ULLtraDIMM products. Diablo has appealed the U.S. District court ruling in federal court, and is hoping to reach a settlement with Netlist before the case goes to trial.

Mehrotra said a settlement must be reached quickly if the ULLtraDIMM platform is to achieve significant sales this year.

“Our ULLtraDIMM expectations in 2015 are fairly small in terms of revenue, as it’s a very new product category and we’re continuing to engage with the customer base,” he said. “But clearly the ULLtraDIMM product category does get impacted by the injunction that we currently have. And that injunction would have to be lifted soon. The legal matter would have to be dissolved soon in order for ULLtraDIMM momentum to begin again, otherwise the sales of ULLtraDIMM would get impacted.”

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