Disk Drive Sector Discussion Forum Message Board

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Technology Stocks : Disk Drive Sector Discussion Forum

WDC 140.23

-8.9%

Nov 20 3:59 PM EST

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To: Mark Madden who wrote (7603)	12/23/1999 3:41:00 PM
From: Mark Oliver	Read Replies (1) of 9256

<Growth in the drive sector has been non-existent if measured in sales or earnings but the unit growth has been steadily over 15% per year. The lower prices have reduced revenues and earnings to no growth status but this will not continue forever.> Why??? <With a good pricing environment sales in earnings could grow beyond the 15% unit growth.> What can bring about this change? Or better yet, why has this dismal position ever been allowed to happen? Are these companies run by terrible managers, or do they have an indefensible position? You mentioned the comparison to semiconductors. Interesting question. Can one compare a process based manufacturer to a discrete manufacturer? It seems to me that a lot of the yields based risk and reward of the process part of disk drives have been off loaded to suppliers, but even they don't seem to be able to make gains. Drive makers have more problem being a good assembler, than an innovative producer of technology. Look at Quantum who seems to be a virtual manufacturer via MKE. Would be interesting to see WDC close, or sell their entire manufacturing process, to move into a virtual manufacturing model using a Jabil, Sanmina or Solectron. But, if they did, what would be left? Or, have they become a sort of virtual manufacturer for IBM, with no obvious benefit? Regards, Mark

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