Western Digital (WDC) Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Western Digital (WDC)

WDC 181.95

+7.3%

3:59 PM EST

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: ptrader who wrote (7380)	11/11/1997 3:36:00 PM
From: Pierre-X	Read Replies (1) of 11057

Re: HDD Cycle I agree with the basic thesis of your post -- the cyclicality of the HDD business. But wouldn't you agree that every situation is different, and that no two cycles are ever exactly the same? One can easily err by projecting too much of the details of history on currently unfolding events. >- A continue of the price war that started last quarter. This was Price wars come about from a situation of oversupply. Show me a price war in an industry that is struggling to catch up with demand. Since capacity takes a while to adjust (it's hard to layoff unneeded drive fabs, if only we could), expect price wars to continue for some time. >- Drive companies will only cutback after they reach large losses. Neither part of this is necessarily true. I cite Randy Befumo "...both Western Digital and Seagate reduced production plans to account for the oversupply." Nor are losses inevitable. Like I said in an earlier post, the amount of blood to be shed will depend on the exact magnitude of overcapacity, but I find statements like this unsettling: "Our goal is to be the No. 3 player in the disk-drive market by the end of the year 2000," said Dave Uriu, product marketing director at Samsung. techweb.cmp.com >This cycle takes about 4 quarters to go full cycle. The length of the downtrend depends on how quickly WDC and other tier 1 drivemakers move away from the contested segments of the business. Given WDC's past performance it is very possible that we can exit the bottom in less than 4 quarters. These are all only opinions, please correct me where I am wrong or where I have drawn incorrect conclusions. Pierre

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next