Competition (from Komag's 10K filing)
Current thin-film disk competitors fall into three groups: U.S. independent
manufacturers, U.S. captive manufacturers, and Japanese/Asian manufacturers.
Based upon research conducted by an independent market research firm, we believe
we are the leading independent supplier of thin-film disks. The only U.S.
independent thin-film disk competitor in 1999 was HMT Technology Corporation.
Japan-based thin-film disk competitors include Fuji Electric Company, Ltd.;
Mitsubishi Chemical Corp.; Showa Denko K.K.; and HOYA Corporation. The U.S.
captive manufacturers include IBM and OEM disk drive manufacturers, such as
Seagate Technology, Inc. ("Seagate") and Western Digital (prior to April 1999),
which manufacture disks as a part of their vertical integration programs.
Western Digital sold its media operation to us during the second quarter of
1999. In addition, Maxtor received a portion of its disk requirements from
MaxMedia, a subsidiary of Hyundai Electronics America. Hyundai Electronics
America is a major shareholder of Maxtor. To date, IBM and other OEM disk drive
manufacturers have sold nominal quantities of disks in the open market.
11<PAGE>
Prior to 1997, the U.S. independent manufacturers, U.S. captive
manufacturers, and Japanese/Asian manufacturers each supplied approximately
one-third of the worldwide thin-film disk unit output. We believe that the
captive manufacturers increased their market share to approximately 40%, 50% and
55% in 1997, 1998 and 1999, respectively. The increased market share for the
captive suppliers heightened price competition among the independent media
suppliers for the remaining available market. This significant pricing pressure
adversely affected the financial results of independent suppliers, including
ours. See "Risk Factors--Competition." |
