By Kim Yoo-chul
It may be over but, then again, it may not.
This is an observation by analysts watching the months-long saga involving Samsung Electronics' pursuit of SanDisk that ended with Samsung retracting its offer to buy the California-based flash card memory producer.
The reason that causes analysts to think again is a downward movement of SanDisk stocks after Samsung's withdrawal, giving another chance for the Korean firm to buy it at a much cheaper price. Some in Samsung also indicated that there may be a card or two up its sleeve.
"It's too early to talk about our next steps, however, we are very closely watching possible moves by SanDisk's board members," a high-ranking Samsung executive told The Korea Times, Thursday.
"Samsung abandoned the $26-per-share offer for SanDisk, but that doesn't mean the game is over," the executive added, asking not to be identified because of the sensitivity of the issue.
Samsung's announcement Wednesday that it was rescinding its offer to buy SanDisk sent the latter's shares down a further 32 percent to $9.93 ― its lowest level since 2003.
"I think by definition, if Samsung comes back to the table, they're probably going to come back much lower," a chip expert, who is familiar with the deal told the newspaper.
"Yes, it's a very possible scenario for Samsung to pursue SanDisk again because it has a license on SanDisk flash memory patents that expires in August, 2009," Jim Handy of Los Gatos market research firm Objective Analysis said in an e-mail.
"If Samsung buys SanDisk on the cheap, it not only gets the license but when the market turns around they could sell SanDisk off and profit handsomely," Handy said.
As he says, the Samsung/SanDisk drama is walking on a well-defined timeline.
After the licensing deal expires in August 2009, Samsung can no longer use SanDisk's intellectual property, which could create "obvious problems" for Samsung. According to insiders, the world's biggest NAND flash maker pays some $400 million, annually, in royalties.
"That means that some deal, whether an acquisition or a new licensing deal, must occur in the coming months," another industry watcher said. A Samsung spokesman said talks over acquisition and a new licensing deal were "separate issues."
Samsung insiders also say the company still regards SanDisk as a "very attractive thing" as the deal, if realized, will give it the opportunity to stamp its authority on the global NAND flash memory market.
SanDisk is the world's biggest top sellers of flash memory chips ― a type of technology used to store music, video and photos in consumer electronic gadgets such as cell phones and MP3 players.
If Samsung buys SanDisk, it will secure key flash memory-related patents owned by them and sales distributions channels, making Samsung decide chip prices to suppliers, globally.
"Time and the situation are both in Samsung's favor," said Jay Kim, head of the technology team at Hyundai Securities. "With no increase in chip prices over the short-term, there is no urgency."
"By pounding SanDisk's stock, though, Samsung could increase the heat on SanDisk from its shareholders as it becomes harder for SanDisk to justify its position that $26 a share undervalued the firm," according to the analyst.