Z,
The most interesting question in the CC to me was the last one, from Kim Alexis. SEG, WDC and QNTM are cutting production to bring supply and demand back into balance (note there was no mention of IBM that I can recall from Michael Brown on this score), she asked, but what about the Asian vendors? What if they ramp up to keep the supply out of balance?
MB's answer was that they (the Asians) weren't making any money on drives either at these falling ASPs, so would be "rational" and will eventually either consolidate, leave the business, or cut production. But the real question behind Alexis's question--which I wish she would have asked--is what if they don't act "rationally", as MB suggests/hopes? After all, they clearly haven't done so with their massive chip over-production. What if their real goal is to drive the US producers out of business eventually (taking their famous "long" view), and it doesn't matter to them if takes 3, 4, 5 years?
I'd like to see some discussion of this point, if anyone has any sage words.
Sam |
