Hmm, a quick look at WDC confirms my view of it - no good.
Sep Q revenues were down 3% year on year. Down is the wrong direction. I don't see why people like WDC with all that lousy hard drive business that has nowhere to go but to eventually be replaced.
Dec Q revenue guidance is down from the disappointing Sep Q revenues. That's also the wrong direction.
WDC has a lot of disk drive revenues. That segment will over time be cannibalized by NAND flash SSD growth.
And NAND, there are seven competitors, heading toward six when SK Hynix buys Intel's NAND fab ...... in 2025! The vibe now is that most of them are ramping Capital Spending, which pushes up production volumes, pushes down prices, and and and, that's no good. There are loads of areas of tech to invest, why invest in a segment with lots of well capitalized heavy hitting competitors that want to ruin the profitability of the industry through capacity expansion which destroys profits, and wait for the weakest to fold? It has at least a decade to play out before you're down to 3 global NAND makers (a la the DRAM industry), why sit through that industry carnage when you can instead just own Google or BABA or ADI, which will just grow with the attractive industries?
And especially, why sit in one of the financially weaker companies with heavy exposure to disk drives?
Yeah, SIMO makes commodity controllers, which work fine in most PCs and cell phones. The world buys lots of PCs and cell phones. Works for me. And SIMO is breaking into the customized enterprise SSD space, with a good chance they're the merchant market leader in that space in three years, unless MRVL or MCHP buys them. Every storage customer isn't Amazon Web Services, many just want a fast storage system, at a nice price. SIMO will make controllers for those guys, and there's lots more of them than there are Amazons. |
