Joel,
I think the Singapore article just restates what has been going on, not really anything new. The issue of less platters per drive is something I've tried to make clear.
The glut of media and heads is also pretty well known. As with all these chip things, the yield is radically improving as the product matures. There are about 5 good makers of MR heads now and they are getting past the start up problems. Now they are ready to sell this stuff like hot bread.
A couple of years ago, I was at a Read Rite annual meeting. They claimed to get over 12,000 usable heads from a wafer. I'm not sure if they were using 4" or 6" wafers. I don't know how many they get today, but it must be more than double.
We really want these component prices to fall as that will reduce the incentive to sell drives with less heads. More heads, more wires.
I learned something today when I clicked on the INVX profile here at the beginning of the thread. It shows financial history; earnings, revenues and margin. There was a good increase of margins which peaked two quarters ago. Now INVX is dropping prices on WAT fast to "stem competition". I believe 2 or 3 quarters ago, WAT was priced over 40 cents and now it's around 27. That's a pretty fast drop. One can assume they have improved yields also and that operating expense in China and Thailand will be assisted by devaluated currency, but still, they have taken a pretty quick drop.
It must mean that they feel pressure from Hutchinson, or else they feel now is a time when they can crush Hutch's hope of getting into the market. Hutch is bleeding cash big time trying to get the TSA project going. I wonder how long they can keep it up?
Falling component prices and heavy pressure to cut costs is not the time when Hutch is going to easily enter the market with a high priced alternative. If they do, they may have to sell it for no profit, or at loss just to get customers hoping to win over market share.
Somebody please call Innovex and see if you can get comfirmation that INVX is supplying Seagate with the SMT on their new portable drives. This would really be the big news of the year. I've tried e-mailing them, but not getting a quick result.
Regards,
Mark |
