Seagate, Hard-Disk Makers Rise on Possible Shortages
Scotts Valley, California, Aug. 16 (Bloomberg) -- Shares of Seagate Technology Inc., the No. 1 maker of computer disk-drives, and its competitors rose after a parts distributor said shortages are appearing in some markets.
Seagate rose 1 7/16 to 30 11/16 in trading of 5.58 million shares, after earlier touching 32 5/8. Shares of Quantum Corp.'s disk-drive tracking stock and of drivemakers Western Digital Corp. and Maxtor Corp. also rose.
Disk-drive makers, whose devices store information and programs on computers, are battling to keep or expand market share as prices on personal computers fall. Prudential Securities analyst Kimberly Alexy said disk-drive distributor CHS Electronics Inc. said it's experiencing shortages for some drives, which could boost prices. ''This is not a signal that the industry is turning to the positive, however,'' said Alexy, who has a ''hold'' rating on the disk-drive makers.
Alexy said she notified her customers that a ''short-term trading opportunity'' exists with the possible shortage and the depressed price of the companies' shares.
Price Competition
CHS Electronics, a Miami-based distributor of computer parts and software primarily in Europe and Latin America, said it's seeing shortages in the group of disk drives found in lower-cost PCs. ''We think that price competition is so intense that manufacturers across the board are unwilling to sell at these prices and that has dried up the supply,'' said Richard Kaminsky, CHS director of investor relations.
Last week, Western Digital, the No. 3 disk-drive maker, said it will cut 2,500 jobs, or 60 percent of its Singapore workforce, as it moves manufacturing to neighboring Malaysia to trim costs.
Western Digital ''took some manufacturing capability off line and that is a positive from an industry standpoint,'' said Jean Orr, a Nutmeg Securities analyst.
Quantum also cut back on some disk-drive manufacturing rather than ship drives at too low a cost, Orr said.
Quantum's hard-disk drive tracking stock rose 1/4 to 7 1/4, after reaching a record 7 15/16 earlier. Western Digital gained 5/8 to 4 3/8 and Maxtor rose 1/2 to 5 17/32.
Some companies that supply parts to the disk-drive makers also rallied.
Hutchinson Technology Inc., a maker of disk-drive suspension assemblies, rose 1 3/4 to 26 5/8, after reaching 28 3/4. Read- Rite Corp., which makes recording heads, rose 17/32 to 4 9/16. |
