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Technology Stocks : Western Digital (WDC)
WDC 158.52-4.6%10:47 AM EST
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To: Sam who wrote (10778)9/6/2003 12:05:36 PM
From: Sarmad Y. Hermiz  Read Replies (1) of 11057
 
Hi Sam,

re >> amazed if WDC actually successfully pulls off the RDRT acquisition.

I'd be amazed if they don't. Considering they are already producing heads and shipping drives using these heads. Of course that is with the 80GB recipe already debugged by readrite.

But I guess you mean the next technology transition. There are 3 considerations. Money, talent, and management.

Money. Assuming that Matt is correct in concluding that 80 GB will last approx 2 years, WD will have $900m cash by then. And they will have deprived Alps and TDK of $1000 m in revenue during the 2 year period. They would also have spent the $1000 m on their own internal head operation. So money will not be in short supply for WD, but there will be less of it for Alps and TDK.

Talent. The most talented people are always in short supply, but with fewer head makers in the business, positions will be easy to fill. WD's success in the past couple of years shows they can attract and hold needed talent.

Management. I don't see the head business as more challenging than other parts of disk drive design and manufacturing. I'm satisfied they can handle it. But I think that is what motivated all the selling in July. Apparently the selling funds don't want to take a chance on WD's management. But I have full confidence they will outshine the competition.

Sarmad
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