Disk Drive Sector Discussion Forum Message Board

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Technology Stocks : Disk Drive Sector Discussion Forum

WDC 256.20

-11.7%

1:38 PM EST

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To: Sam who wrote (1753)	12/11/1997 4:05:00 PM
From: Pierre-X	Read Replies (1) of 9256

Sam, lets talk about this question of overbuilding on the part of the existing players. It's key to the whole issue. IF -- the big three have NOT overbuilt, then things are going pretty much according to Fujitsu/Maxtor/Samsung plan. They've factored the price plunge into their plans and events are merely unfolding as anticipated. Even so, liquidity to survive and ramp the next generation is not assured. If -- as I posit, the big three HAVE overbuilt, the the Asian DD guys are getting hurt, and are vulnerable. The best long term strategy for the big three should be to keep their capacity online, even go bonkers and ramp more production. Push prices down, down, down, to KILL the enemy. Unfortunately this won't happen, shareholders will whine too much about the consequent 2-3 quarters of big bleeding. CEO of WDC William Haggerty's own words "We will not participate in absurd pricing to maintain market share" in the 1Q98 CC. It's not clear if the big three even have the liquidity and cash reserves themselves to undertake such an aggression. PX (Shirtless, sewing some fig leaves together)

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