SanDisk (NASDAQ:SNDK) did not have a bad quarter, but it was not good enough. The company also cautioned that this year will be tough. Revenue was $1.25 billion, up from $1.16 billion. Adjusted income was 69 cents per share. Analysts had expected SanDisk to report earnings of 64 cents on revenue of $1.27 billion, according to Thomson Financial.

According to MarketWatch, "flash memory chips, which are used in devices such as digital cameras, camcorders and mp3 music players, have been one of the hot areas of the semiconductor market, but a recent glut has led to falling prices." That trend will make it very hard for SanDisk to get a reasonable footing going into the balance of this year. That means it share prices will be under more pressure. Barron's writes that SanDisk's guidance going into the current quarter is already light. The newspaper writes, "the company told investors on its post-earnings conference call that it expects first quarter revenue of $775 million to $875 million, which is far short of the Street consensus of $1.01 billion."

It is something of a shame since flash memory is used in such a broad array of devices, especially portable music players. But the huge amount of manufacturing capacity in the industry may not wash out of the market for a year or more.

That is why SanDisk's shares are down from a 52-week high of $59.75 to $25.89 and are likely to go much lower.

Douglas A. McIntyre is an editor at 247wallst.com.