Todd, I think its a kind of "payback" time for WDC. When QNTM and SEG went through transition to MR, WDC made some inroads picking up market share. From the new estimates, the WDC press release, and stuff I'm hearing from QNTM, it looks like maybe QNTM has a chance to recapture some of that market share back (or share it with Fujitsu, IBM, and other aggressors). If WDC wants to be 75% MR by end of Q4, ahead of schedule, they will probably have some production problems irregardless of their statement to lower production.
The other possibility is for them to move directly to GMR. If they are going to get nailed for a transition, they might as well do a leapfrog. However, I saw some figures for GMR head production and the volumes looked pretty minimal until the end of 98. In any case, they might have to lower capacity, lose market share for the next 2 quarters ... add that to margin pressures and you get losses until the transition is over.
At least that's my take on it.
-Bill |
