PX meets HTML tags and survives....... to produce an extremely useful site for which he can give himself a pat in the back. Let me contribute this link to the pool of info you are building on your site. This one is particularly useful because it amplifies the points you made in your excellent paper re: the boom-and-bust or today's-glut is-tomorrow's-shortage nature of the HDD biz.
From Partial to Systemic Globalization: International
Production Networks in the Electronics Industry
brie.berkeley.edu
Dieter Ernst
April 1997
This is a joint publication of The Data Storage Industry Globalization Project Report 97-02, Graduate School of International Relations and Pacific Studies, University of California at San Diego, and BRIE Working Paper #98, Berkeley Roundtable on the International Economy, University of California at Berkeley, 1997.
This working paper takes a look at the globalization of manufacturing in the electronics industry with a focus on the disk drive industry, which is rather unique in that it walks like an oligopoly, talks like an oligopoly, but remains as volatile as any high-tech commodity biz. There are in-depth looks at Seagate, IBM-SSD, Maxtor, Quantum, etc.
Below is an interesting excerpt on Quantum.
....In 1984, Quantum established a close relationship with Matsushita Kotobuki (MKE), a majority-owned subsidiary (57.3 percent) of Matsushita Electric Industries Company of Japan.(192) Quantum's management assumed that nothing could stop Japanese firms from taking the lead in the HDD industry, as they had done before for floppy disk drives (FDDs). Thus, linking up with a Japanese partner was conceived as an effective insurance policy that would shield Quantum from aggressive attacks. Quantum also expected that this cooperation would lead to substantial economies of specialization: Quantum would supply design and marketing expertise, while MKE would supply the
manufacturing know-how.
Quantum chose MKE for four reasons:
(1) MKE was a pure manufacturing company which had always depended on the designs, marketing, and sales efforts of the parent company for the products it manufactured. Thus, Quantum concluded that MKE was unlikely to become a direct competitor any time soon.(193)
(2) MKE had an excellent reputation as a leading-edge producer of electro-mechanical components and systems that required precision engineering. Its VCR manufacturing lines were among the most highly automated and efficient, and the company was famous for its capacity to quickly ramp up production and improve yields once a decision had been made to start production.
(3) MKE was willing to provide substantial funds and human resources, clearly indicating a long-term commitment. And
(4) MKE went out of its way to commit itself to continuous cost improvements. In particular, MKE was willing to accept a pricing arrangement incorporating risk-sharing in the event of exchange rate fluctuations....
Footnote #193 - In the light of recent developments, this assumption becomes now highly debatable. While originally MKE supplied only low-end drives, it now produces Quantum's full product range, including the highly profitable high-end drives for mainframes and network servers. One wonders how long MKE will wait till it disconnects itself from Quantum and enters the market on its own.
Highly profitable? For MKE maybe, but QNTM has taken close to $300 million in write-offs on their high-end drives the last 6 quarters - a time span in which the high-end biz has been marginally profitable in only 2 quarters (March and June 1997 quarters).
That quibble aside, this paper and Pierre-X's web site are must-read for past, present and future disk drive investors.
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