Hey Roger,
That's really interesting. The Medalist Pro 9.1 GB, which I understand is going to be priced between $500-550 and available in volume in December, is also significant in several other respects:
1) First 7200 rpm desktop disk drive. Everybody else is at 5400 rpm and below. There's a 40% performance gap between the 10,000 rpm Cheetahs and the gaggle of 7,200 rpm disk drives, and there's a 33% performance gap between the 7200 rpm Medalist Desk Pro and the rest of the field. Performance defined in terms of average access times and sustainted transfer rates.
2) First disk drive to use the motors with the fluid bearings. As I have detailed in my previous posts, everybody is going to need this to go beyond 10,000 rpm. SEG is going to transition all their disk drives to this platform over 3 1/2 years. Even if the virtually integrated players increase R&D to catch up in design, they are still handicapped by the fact that only SEG has developed the supply line (internal, Sanyo, Seiko, Taylor-something) to supply the motors.
I believe it was Bill Fischofer who pointed out the potential bottlenecks in computer system design. For example, Intel is planning to use RMBS's memory bandwidth architecture to open up a 1.6 Gigabyte/second pipe between Merced (due 1999) and the DRAM subsystem possibly eliminating the secondary cache (SRAM) that the system designers have been using to buffer the increasingly faster processor and the slower DRAMs. In order to reduce the latency in the overall memory scheme, the disk drive makers will have to increase the speed of their disk drives primarily by increasing areal density AND increasing spindle speed.
What I see happening is that SEG will continue to crank out the volume in the sub-$1,000 PC category, which is the fastest growing segment of the consumer PC market (coming soon: sub-$1,000 notebooks and sub-$1,000 enterprise PCs), primarily by extending the useful life of their TFI heads and trailing-edge MR heads. Although SEG doesn't have the most advanced TFI heads, I believe it is still the largest and most efficient manufacturer of TFI heads with yields somewhere north of 85%. In 1996, SEG accounted for a little over 50% of the total global production of TFI heads.
I'm guessing that with the developing overcapacity in disk drive assembly and heads, along with the current glut in platters (newest player: Dow Chemicals specializing in media optimized for 10,000 rpm and above, est. 1998 capacity: 250K/month, 1999 capacity: 1.0 M/month), there are going to be some interesting changes to SEG's manufacturing transitions. It's too bad that SEG decided not to release their September quarter balance sheet or limited the access to the CC because those would have given us a better sense of their plans.
Everything I have read suggests to me that SEG's assault on the mid to high-end of the desktop disk drive segment will intensify in the March quarter. That should be an interesting market with computer PC makers having a wider range of choices (12 GB Bigfoots $400, 7200 rpm Medalist Pros-$500-550, etc).
SEG's enterprise drives should also benefit from the higher density MR heads and should firm up SEG's margins. If the resulting performance boosts are significant enough, this may allow SEG to recapture some market share.
Interesting next few months ahead. Terastor and Quinta announcements are scheduled before the end of the year as well as SEG's 4.0 GB/in2 GMR program. Keep your ears to the ground, folks.
Gus |
