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Technology Stocks : Seagate Technology

STX 278.47

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Nov 6 4:00 PM EST

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From: go_gatrz	10/12/2006 7:56:16 AM
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Regarding Fujitsu - whom some think will be the next Samsung (in HDDs): I don't think so. They exited the cutthroat desktop business awhile back, and it hasn't gotten any friendlier. If you rummage around their investor site, you can pick up a few nuggets of information about their HDD biz (which for Samsung, Toshiba, and Fujitsu is very hard to come by). They expect to make about 34Mill HDD in their FY2007 (they are in the middle of it now). Their drives are all 2.5" Mobile/Enterprise and 3.5" Enterprise. They project operating income of $59Mill. Compare that to Hitachi, which is forecast to lose $356Mill on shipments of ~73Mill HDD. What sad state Hitachi is in. Or compare Fujitsu to WDC, which last QTR had operating income of $94Mill on 19Mill drives. WDC is about 3x more profitable/drive than Fujitsu. Yet just about all WDC sales are in the desktop segment. I cannot imagine Samsung being more profitable than Fujitsu (if at all). They cover the mobile segment, but not the Enterprise (highest margins of all). If either Samsung, Fujitsu, or Toshiba are serious about staying in the HDD market, WDC should look really tempting.

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