By Shara Tibken Of DOW JONES NEWSWIRES NEW YORK -(Dow Jones)- SanDisk Corp. (SNDK) expects flash memory supply and demand to be in balance this year, the chip maker's chief executive said, helping the company rebound from recent softness in the market. Sanjay Mehrotra, speaking Thursday during the company's analyst day, said that the industry capacity growth rate is slowing, in part because the industry is now adding capacity on a large existing install base and because individual flash suppliers are choosing to produce less. Bit growth for flash memory, commonly used in mobile devices, in the industry grew about 75% in 2007, he said. By comparison, SanDisk expects 70% to 75% growth this year and 50% to 60% growth next year. SanDisk expects its own bit growth this year to be slightly less than the 77% increase it posted in 2011. "I'm expecting a healthy supply balance overall in 2012 and beyond for our industry," Mehrotra said. SanDisk shares, down 7.6% over the past 12 months, recently slipped a fraction to $47.64. SanDisk--which makes flash memory for smartphones, tablets and other devices--has been benefiting from soaring demand for mobile devices. But the company last month provided soft guidance for the current quarter and year, and analysts have been concerned about how much flash capacity will grow this year. An oversupply of chips in the market causes lower pricing and weaker financial results at the technology providers. To deal with softer demand and declining pricing, SanDisk has said it would halt capacity expansion at its new chip factory from the end of January until at least July. The company originally planned to restart production in May. Mehrotra on Thursday said the capacity expansion at its new factory, dubbed Fab 5, will be driven by demand requirements. He said the facility's second phase will be built no sooner than 2013. SanDisk, once mainly known for small storage cards and thumb drives sold in retail stores, has been diversifying its operations. Along with its push in flash for mobile devices, the company also recently made a couple acquisitions to give it a bigger foothold in solid state drives, which are being used in greater numbers in data centers and personal computers. Mehrotra said solid state drives will comprise about 10% of SanDisk's revenue this year, up from about 3% in 2011. He expects the percentage to rise to 25% in 2014. "As we accelerate the growth of our [solid state drive] business on the client and enterprise side and as we deliver greater value with software to our partners, we will be bringing a higher value, differentiated mix of products into our portfolio," he said. "The best is yet to come for SanDisk." --By Shara Tibken, Dow Jones Newswires; 212-416-2189; shara.tibken@dowjones.com
