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Technology Stocks : Disk Drive Sector Discussion Forum

WDC 176.34

-5.8%

Dec 12 9:30 AM EST

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To: Pierre-X who wrote (1503)	11/11/1997 1:18:00 AM
From: William T. Katz	Read Replies (2) of 9256

The only comments I have heard re: oversupply came in the WDC conf call. In that call, the trouble spots were in the 2.5 gb and under arena. WDC was also concerned that 3 gb might come under attack. They had not noticed any bad pricing pressures on higher capacity drives. This evidence was direct from WDC. One SI contributor had called QNTM IR and was told QNTM was not finding untoward pricing pressures at the larger desktop drive arena. It would seem for this quarter, that 3 gb or below may suffer margin erosion. How quickly will this creep to larger capacities? Will worldwide MR head inventories support rapid proliferation of larger sized drives (6 gb+)? At this point, there is not any verifiable evidence that severe pricing pressures have entered the 3gb and higher capacity area. While I agree this may occur soon, it was supposedly not visible a week ago to WDC. So do we have irrational unexuberence at this time?

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