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Technology Stocks : Read-Rite

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To: Mark Fleming who started this subject11/11/2000 1:09:35 PM
From: in_cog_nito  Read Replies (1) of 5058
 
New news: Read-Rite, IBM ship MR heads to WD
eetimes.com

IRVINE, Calif. -- Head makers are touting their contracts with disk drive maker Western Digital Corp., which is the largest drivemaker without a captive magnetoresistive head supply. Read-Rite Corp. (Milpitas, Calif.) and IBM Storage Systems (San Jose, Calif.) are leading suppliers, with Sanyo also providing MR heads to WD, which is switching all its drives over to MR technology.

For Read-Rite, the deal marks a major design win. Western Digital, which is one of the top suppliers in the all-important desktop PC market, is by far the largest customer for MR heads. The firm currently sells MR heads to Maxtor Corp. and Micropolis Corp., which have fairly small percentages of market share. Read-Rite also sells heads to Quantum Corp., which is augmenting the production of its internal head-making operation, which it acquired from Digital Equipment Corp.

The head supplier is still ramping up its MR head capability to meet the needs of the disk drive industry, which is rapidly shifting from inductive thin film heads to MR technology in order to increase drive density and capacity. Peripheral Research (Santa Barbara, Calif.) predicts that MR shipments will hit 481 million this year, representing a bit more than half the total head shipments for 1997. Next year, MR shipments will comprise the bulk of head usage, the research firm predicts.

The heads used by WD also represent a step forward in capacity, storing 2.1 Gbytes on a 301/2-inch platter. That's substantially higher areal density than the 1.5 Mbyte capacity capable with other MR heads shipped by Read-Rite.

The WD contract is also a major design win for IBM, which only recently started shipping heads externally. IBM has made MR heads for internal usage for most of the decade, and completed its transition before most other drivemakers had moved their MR programs beyond pilot products.

IBM executives predict that MR shipments will be a major revenue source for the company in coming years. IBM is also leading in the development of next generation MR heads, commonly called Giant MR technology
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