Disk drives aren't becoming obsolete. And demand is growing, not slowing. But capacity has grown with it, and achieving a balance between supply and demand has proven, shall we say, troublesome for the sector. HTCH has been hurt by the growth of single platter drives, which require fewer heads and thus fewer suspensions, as well as by the fact that DD vendors in general are trying to cut the number of heads in their drives via higher areal density. Whether this trend continues, and whether or not growth in high end drives will offset it, is plausibly, IMO, why HTCH has been weak, along with general sector weakness. If HTCH is to grow despite the sector, it will have to show some sign of sustainable profitability, which of late has been lacking.
I believe that a consensus of this thread is that the drive sector at large will never get "hot like the internet companies", although they have already gotten cold and so are, at these levels, fairly riskless if you believe that the company you are investing in will survive the next year or two. At least plausibly the sector may at some point yield some good capital gains from these very depressed levels, presuming that some sort of shakeout/consolidation occurs in the sector and independent companies remain key players.
Hope that helps a little. Dissenting opinions/perspectives are always welcome.
Sam |
