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Technology Stocks : Read-Rite

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To: Mark Oliver who wrote (4742)	4/23/1999 11:33:00 AM
From: T Bowl	Read Replies (2) of 5058

<one foot in the grave> And the only onlookers have shovels in hand. I think that the KMAG and MXTR CC shed some light on Indy supplier futures. The most interesting comments IMO: MXTR-Advanced technology products from suppliers are not a problem to find. Readily available. Multiple suppliers. KMAG- - demand for TeraB is forecast to grow 88% this year. DD size is forecast to grow 62% which means an increase of 17% DD shipments. However, areal density growth in GB/platter is forecast to grow 72% which means a 9% increase in platters shipped.(Better than last year when it contracted). Platter cnts are shrinking in DDs. There is a lot of media capacity out there - 9% growth this year will NOT relieve oversupply problem... Heads are gonna be in the same position. RDRT isn't going to avoid this. It's only small volume, but WDC has started shipping their 7200rpm products - with IBM heads... The historical growth in areal density has been trashed. Advanced technology is too readily available and in excess supply. Any potential for DD makers going down the tube probably starts at Samsung and WDC(although Lawrence doesn't believe so soon...) Both are 100% Indy customers. Any loss there will mean an overall loss to the Indy suppliers of both heads and media - certainly more for the US based suppliers too... Biggest losers = RDRT, KMAG, HMTT and of course to LKs delight APM is finally gonna kick the bucket. Best time to make money in this sector is when there is a problem with a technological jump - pick the winner in this transition and you make money. Right now we're once again in a bad position of too much supply, too little demand for capacity and readily available advanced technology. Were getting started here with another miserable summer in the DD maker arena. But it'll be worse at the Indys as usual. There will not be money made in the Indy position for quite some time IMO. todd

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