NEW YORK (Reuters) - SanDisk Corp Chief Executive Eli Harari said 2009 could turn out to be "significantly better" than anticipated at the start of the year, as big cutbacks in flash memory production bring balance back to an industry stung by oversupply.
"I feel as good now as I've felt at any time in the last three or four years," Harari told the Reuters Global Technology Summit in New York on Tuesday.
Shares of SANDISK (SNDK.NQ)had traded lower Tuesday morning but turned positive after Harari said prices for flash memory have doubled over the past four months to more than $2 per gigabyte, as producers have cut back substantially on capacity.
"Where we were at the beginning of the year was unsustainable," he said.
While warning that visibility is still low, Harari said he was "cautiously optimistic" and that consumer demand has been stronger than expected.
"In the consumer space demand has been remarkably solid, (although) I wouldn't say stellar," he said.
SanDisk is the No. 1 maker of flash memory cards used in digital cameras and other electronic devices, and 60 percent of the company's business is in retail.
Harari called mobile phones the main engine for growth and potentially the biggest future vehicle for flash memory.
He characterized SanDisk's negotiations with Samsung Electronics, to renew their patent licensing agreement, as "quite intense."
The current agreement is set to expire in August.
Harari said both sides would prefer to come to a negotiated agreement by August 14, the day the seven-year deal ends.
"Both parties are serious and sincere to try to come up with a resolution that is acceptable to both sides," Harari said.
If there is no agreement, SanDisk plans to move to "Plan B," he said, without disclosing what that might be.
But he indicated the possibility of litigation if an agreement is not reached by the pact's expiration date, as Samsung and its customers would then be infringing patents that SanDisk holds.
Samsung pays about $350 million a year in royalties to SanDisk to use its patented flash memory technology.
SanDisk shares were off 25 cents, or 1.7 percent, at $14.48 in late-morning trade on Nasdaq, down from a session high of $15.09.
(Reporting by Franklin Paul, Gabriel Madway and Anupreeta Das; Editing by John Wallace)
