Disk Drive Sector Discussion Forum Message Board

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Technology Stocks : Disk Drive Sector Discussion Forum

WDC 139.09

-0.8%

Nov 21 9:30 AM EST

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To: Stitch who wrote (3021)	4/25/1998 6:57:00 PM
From: Pierre-X	Read Replies (1) of 9256

Re: DDSD; Bottoms; Predictions I second your kudos to the thread. It has been and continues to be one of the best on SI. You said: I now believe we have seen the lows for the DD stocks. I've got to respond to that. <g> 1. I bought a WD 4.3GB UDMA disk for $135. That's 3.1 cents per meg. We're on track for 2 cents/meg by year end, although I'd be the FIRST person to moan about the pitfalls of simple extrapolation. Let's think about the conditions necessary to bring about a 2 cent environment: a) Continued overcapacity at the drivemakers and their suppliers b) Continued high inventory levels c) Continued climbing of the production learning curve for the new density points If you think these are all true going forward, then the drivemakers could walk the plank yet again. Overcapacity is determined by demand levels. I still have not thought of, nor seen a convincing for an application that will provide the necessary demand stimulus for the DD industry to move into a shortage condition, which is necessary for economic rents that provide fat profits and rapid share price appreciation. My long winded way of saying the sector is still screwed. <g> God bless, PX

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