Pierre,
I agree with your post, so nice post!
On your last note about players likely to quit:
"my wagers on the next several players to quit in order of likelihood
are:
1. JTS
2. Hitachi
3. SGS Thomson
4. Samsung
5. Low end product lines at Seagate"
JTS almost for sure. I don't know much Hitachi and Thomson are into drives, and why they are in the business (i.e., just captive, or are they actually trying to get some outside market share as well?). But I see Samsung as potentially the biggest problem. If they are essentially Korea pretending to be a company--that is, if Korea tells them, "Gee guys, go get market share, build factories, employ our people, and we'll give you whatever money you need for the trick", then the drive business will be indeed in as much trouble as the DRAM business is in now. These people don't have to pay attention to reality--they can afford to sustain as much loss as it takes to get other people to exit the business, since there are no consequences for them. They won't go out of business as long as Korea itself or the IMF just trundles in with more money to bail them out. In the long run, this is a losing game, of course, but it can go on for a very long time as long as the IMF plays ball with them. And the damage to SEG, WDC and QNTM will be done.
The knife will keep falling this month. But I hope next year will bring better news. The best news, IMO, would be to see Samsung/Korea back off from targetting this industry, or at least make Samsung compete on its own, w/o unlimited funds from their government and the IMF. |
