The secret behind the US$5.8 billion hostile takeover attempt of SanDisk by Samsung is out following revelations that SanDisk has developed powerful new chip technology that could transform portable computing.
SanDisk's X4 technology can reportedly double the capacity, lower the cost and potentially extend the useful life of NAND flash memory. It was invented by Msystems, an Israeli company that SanDisk bought in 2006.
Most NAND flash chips hold one or two bits of data in each storage cell. X4 technology stores four bits – a big jump in the technology race.
Arbitrators in May found that SanDisk was within its rights cancelling a contract that gave Samsung rights to X4 technology. A federal court in New York recently affirmed that ruling. At the hearing, Samsung testified the X4 ruling could cost it billions of dollars.
The smaller US company was a pioneer in exploiting flash memory in a rapidly growing market, from iPods to netbooks and small PCs. However, Samsung is now the biggest manufacturer of flash memory chips.
The Korean company disclosed its US$26-a-share offer for SanDisk on September 16. SanDisk maintains the bid significantly undervalues the company.
