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Technology Stocks : Western Digital (WDC)

WDC 220.43

-0.7%

1:37 PM EST

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To: Randy Ellingson who wrote (9083)	4/10/1998 4:52:00 PM
From: Jacky AY	Read Replies (1) of 11057

Your scenario #1 maybe correct. However, WDC probably did it not because on their own wishes but rather "WD continues to struggle with its 2.1GB per disk program." (see my post #9044) For WDC who may have trouble in MR program, manufacturing cost is going to be significantly higher than that of their competitors, thereby limiting their ability to cut price in response to competition. Your scenario #2 is totally impossible since everyone in the PC box-making except those BTO guys are having inventory problem. Compaq and IBM were quoted as the major OEM's for WDC drives. It's very likely that WDC are currently experiencing slow orders until supply/demand balance is reached some 2 quarters from now. There're rumors on the street that the high-end DD inventory has been relieved. But that won't help WDC much since SEG is still the market leader in the high-end afterall with their 10000-rpm speediest drive and 2.5-GB/p rolling out this quarter. The only medicine for WDC is to put more $$$ in R&D to catch up with the market. They were once the time-to-market leader but now they may be the last one to roll out 2.5-2.8GB/p products. As far as I know, only QNTM, WDC and Fujitsu haven't announced products in that density range...

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