Stitch, Tom, Z,
Any comment on this Magnecomp/SAE JV? Post from Yahoo:
Magnecomp with TDK ? Could be big.
by: mulabandha
3/13/00 4:53 pm
Msg: 2556 of 2557
MAGNECOMP INTERNATIONAL LIMITED
MEMORANDUM OF UNDERSTANDING ( ' MOU ' )
The Board of Directors of Magnecomp International Limited (the Company) is pleased to announce that the
Company has on 24 February 2000 entered into a Memorandum of Understanding with SAE Magnetics (HK) Ltd,
("SAE") a wholly owned subsidiary of TDK Corporation ("TDK") of Japan to establish a joint venture company
("JV") in Hong Kong. The objective of the JV is to develop value added suspension assemblies. Value added
suspensions involve the addition of electronic components onto conventional suspensions to form electro-mechanical
devices. This allows more efficient and cost effective data storage on magnetic disks in disk drives. The JV will be
housed in the new plant facilities owned by Magnecomp Technology Ltd. in Changan, China. The JV company will
be 51 % owned by the Magnecomp Group and 49 % owned by SAE/TDK.SAE is one of the largest independent
Original Equipment Manufacturers ("OEM") of Head Gimbals Assemblies ("HGA") and Head Stack Assemblies
("HSA") in the world. Its holding company, TDK, is one of the world's largest and most advanced magnetic head
manufacturers with net assets in excess of US $ 5 billion as at 31 March 1999.Through the JV, the Magnecomp
Group and SAE will be able to combine their respective strengths in suspension assembly and HGA/HSA
technology. This will allow joint development and production of a larger volume of value added suspension
assemblies at a more competitive price to better serve the needs of SAE and disk drive customers. SAE is currently
one of the Group's major customers. By entering into a closer long term partnership with SAE, the Magnecomp
Group should achieve a higher volume of sales at a lower capital cost, be better positioned with customers relative to
advanced products, and reduce process steps allowing a lower cost structure.It is intended that SAE will provide the
process development technology and resources to the JV thereby facilitating the development and qualifying process.
This will significantly reduce the time and resources required of the Magnecomp Group if it has to pursue the
development and production on its own.The directors expect the proposed JV to contribute positively to the
Magnecomp Group. For the current financial year, however, the JV is not expected to have any material impact on
the earnings per share and the net tangible assets per share of the Company nor the Group.None of the directors or
substantial shareholders has any interest, direct or indirect, in the SAE or TDK.The Company will make further
appropriate announcements at such times, if and when the Company enters into definitive JV agreement. |
