Well, Stitch first I'll call you for lunch tomorrow on the c-phone.
So now that it was you that opened the door on the TDK problem, I'll elaborate for you and the rest of the thread since it will most certainly have a significant affect on the December quarter once the word gets.
The affect on investement opportunities is equally profound.
As accurately as I have, from several well placed sources hera and in Japan, the Typhon that hit Japan last week left parts of Nagoya Japan under water, not just any old water, but as it was told to me - "stinky sewer water". That stinky sewer water was up to two feet deep in a the TDK 6-inch wafer fab facility I believe run by a subcontractor (TDK has its own 3-inch facility used for R&D).
That was Tuesday, shutting down the facility. My Japanese source said that as of today, 8 days later, the facilty is still shut down. Very, very unfortunate twist of fate by mothernature.
As of yesterday, TDK has "de-committed" head shipments to WD, Maxtor and Fujitsu. TDK supplies 30% of Fujitsu heads and has de-committed to 20%. Numbers of the Maxtor and WD decommitment weren't disclosed.
As I recall, TDK supplies the lion share of heads to Quantum. No word yet on the Quantum de-commitment.
One of ny analyst friend had forecasted that this year 830 million heads would be used (captured and merchant) of which he had forecasted TDK to ship about 250 million (RDRT was forecasted to do 70 million to put it all in perspective).
About the same time TDK shut down, Quantum and Maxtor were rumored to have an announcement about their plans ready, but I strongly suspect that the announcement will be postponed until the magnitude of the problem is understood.
Sources tell that TDK had from 2 to 4 weeks of supply in the pipeline. I can't confirm this but it sounds right. TDK's cycle time, product start to finished heads, is 6 weeks. (RDRT is running 8 weeks). It will take TDK six weeks to really know if the new wafers are to spec. - thats after they get the facility running. Tehn I would assume that the drive guys will have to re-certify (qual)the new heads and that will add weeks.
At this point I don't know if TDK has another 6-inch wafer fab facility (but I don't think so)
Based on my calculations for TDK share, average # number of heads per drive shipping in the December quarter, the industry losses 1.4 million disk drives each week they don't have TDK heads.
So what do you think that will do to HDD allocation and pricing in the December quarter?
I have more but let us digest this first.
Regards,
LT |
