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Technology Stocks : Ampex Corp: Digital Storage
AMPX 10.87+2.5%Dec 2 3:59 PM EST

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To: jonggua who wrote (2284)3/12/1997 11:20:00 PM
From: boogaloo   of 3256
 
More TeraStor info found at Forbes Web Page. March 24 issue.
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How much disk storage does a computer user need? An infinite amount.
TeraStor plans to supply almost that much.
Trillions of bytes

By Eric Nee

COMPUTER DISK STORAGE is like sex: You can never have too
much. The average personal computer sold this year will have 2
gigabytes-2 billion characters-of storage. That is ten times the storage
capacity of just four years ago.

Enough? Far from it. The Microsoft Windows 95 installed on that disk
drive will gobble up 2% of the space before you even get the machine.
The current Windows is already 300 times as space-hungry as the first
version, which was introduced in 1985. You can bet that the next version
of Windows will be bigger still.

Are you going to buy a digital camera? Or edit home movies on your
computer? Two gigabytes is going to look pretty scrawny before you are
done.

A new San Jose, Calif. firm, TeraStor Corp., hopes to make its fortune
on this insatiable demand for storage. TeraStor has developed a
technology that it claims will offer dramatic improvements in the storage
capacity and price of disk drives. So excited are venture capitalists about
the potential for TeraStor's invention that they have thrust $50 million at
the company (including $20 million in a pending deal) and currently value
it at something around $300 million. Among the angels are Information
Technology Ventures in Menlo Park, Calif. and a firm bankrolled by
Microsoft cofounder Paul Allen.
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The handsome valuation is for an outfit that has yet to sell a single disk
drive and does not even plan to manufacture any. TeraStor is going to
farm out manufacture of the platters, read/write heads and electronic
controls. It will also use outside firms to assemble and test the drives.
TeraStor is going to slap its name on the disk drives-and clean up if they
work as advertised.

TeraStor, in short, is at this point not much more than an idea and the
three smart fellows that come with it. TeraStor's chief executive is James
McCoy, who helped found two of the disk drive industry's largest firms,
Quantum Corp. in 1980 and Maxtor Corp. in 1982. "I'm planning on this
being my third billion-dollar startup," boasts McCoy, now 50. The other
two founders of TeraStor are Gordon Knight, the chief technical officer
and a founder of Maxoptix Corp., and chief financier William Dobbin,
who cofounded Maxtor and took it public.

The big issue in storage technology is density: How many bits can you
squeeze onto a square inch of disk space? Garden-variety disks sold today
can do a billion bits per square inch. TeraStor says it can do ten times
that. What this means is that each blip of information takes up an
unimaginably tiny amount of real estate-something less than a femto-are,
to be precise.

A what? An are is the size of a two-bedroom apartment. Femto means
quadrillionth.
ÿ

Sony missed a good
invention: "It's a big firm,
and it takes them a long time
to make their mind up."

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Hard to picture? Turn the numbers around. TeraStor's density means that
a disk just 4 3/4 inches across will store 20 gigabytes on one side. That's
more than enough capacity for four feature-length Hollywood movies.

For comparison, the new digital video disks (DVD) due to hit the shelves
this spring from Matsushita, Sony and others can store only one movie on
their 4.7 gigabytes of space. The DVD players will be inferior to
TeraStor's product in another important way: DVD will be read-only, at
least initially, while TeraStor will be read/write, just like the hard disks
now installed inside PCs. That is, you can use DVD to watch a movie or
play a game, but you can't store a family photo album on it. Rewritable
DVD is probably a year and a half away and will be good only for 2.6
gigabytes.

How does TeraStor's technology compare with typical hard drives in
other respects? The latter have a seek time-the time it takes to locate a
random piece of data on the disk-of 15 to 20 milliseconds. They can
feed data into the computer's semiconductor memory at 15 megabytes per
second. Gordon Knight is afraid to commit to TeraStor's specs (or price)
so soon, but says his product will be competitive with old-fashioned hard
drives. McCoy aims to have TeraStor drives on store shelves early next
year.

TeraStor, says J. Philip Devin, storage analyst at the market research firm
Dataquest, is "potentially one of the most important things I've seen in my
[11-year] career."

TeraStor's storage technology traces its lineage from magneto-optical
drives. Like purely magnetic hard drives, magneto-optical drives store
bits (1s or 0s) on the disk as very small positive or negative magnetic
fields, hence the "magneto." The magneto-optical drives differ from hard
drives by adding a laser beam to the recording head to make possible even
smaller magnetic fields, packing more bits per square inch, hence the
"optical."

Magneto-optical storage has been around for roughly a decade, but it
hasn't caught on because it hasn't yet offered a clear price or performance
gain on traditional magnetic drives. TeraStor got around this problem with
two inventions that slipped between the fingers of Digital Equipment and
Sony.
ÿ


Hard drive: size up, price
down
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One of these inventions is a microscopic lens developed in 1992 by
Gordon Kino, a professor of electrical engineering at Stanford
University, and one of his grad students, Scott Mansfield. The
Kino-Mansfield lens boosts the density of a magneto-optical drive (see
diagram).

Kino got funding in part from Sony and tried unsuccessfully to get Sony
to license the technology. "It's a big firm, and it takes them a long time to
make their mind up," says Kino. IBM also worked with Kino on the lens,
but then cut back research on optical storage. TeraStor bought the patents
from Stanford for $15,000, plus what is now between 1% and 2% of the
company.

The other invention allows TeraStor to use a fast-moving "flying head" to
read and record. This is standard in magnetic drives but new to
magneto-optical drives. It's tricky to get a flying head to handle optical
information.

The flying-head technology was developed by Digital Equipment and sold
along with the rest of its storage business to Quantum, McCoy's old firm,
in 1994. McCoy persuaded Quantum to trade a license on the head and
disk for a 15% stake in TeraStor.

Professor Kino, an adviser to TeraStor, is naturally rooting for the
company. But he concedes that other storage firms could eventually beat
it. IBM is working on exotic storage technologies such as holography.
DVD is another threat. It might catch on quickly, then get scaled up to
higher densities and a read/write ability.

By then, of course, McCoy expects to be one step ahead with his
technology. "The ability of a single user to have a terabyte of storage will
become real before the end of this decade," he says. If he doesn't deliver,
he should have to rename his company. ÿ
ÿ

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Fine writing

The TeraStor magneto-optical drive combines laser optics and
conventional magnetic recording. The red laser heats up a tiny spot
on the disk, allowing a magnetic head to change a bit of data.
Magneto-optical drives have been around for a decade, but this one,
if it succeeds, will represent a great leap forward in performance.
Key to this performance is a tiny "solid immersion" lens coinvented
by Gordon Kino, a professor at Stanford. Kino's lens, made of
glass, augments the usual "objective" laser lens. In slowing down
the light beam to half its normal speed in air, it shortens the beam's
wavelength. That phenomenon continues across the 0.15-micron
air gap to the surface of the recording disk. Shorter wavelengths
make for finer detail. (The lens' moniker is an allusion to an old
trick in which a microscope lens is dunked in the liquid that holds a
tiny sample.) Here, the gap between the second lens and the
recording disk is so tiny that the lens is, so to speak, "immersed" in
the disk. The second lens cuts the width of a memory cell by half.
Two other tricks-recording closer to the surface of the disk and
overlapping the cells a bit-provide the rest of TeraStor's tenfold
density gain over the purely magnetic drives used in most
computers today. ÿÿ
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