Yogi
HTCH is, without doubt, my personal favorite company, having made me more money than any other over the last 7 years.
They make the mechanical arm structure structurally linking voice coil actuator to flying head mounted on tip. Its called a "suspension" because, acting as a spring, it "suspends" the head a microinch or so above the media surface. A bit of a misnomer since it is really aerodynamic forces which play an equal role. Their forte is precision metal bending to tolerances you don't normally imagine. The oft repeated claim is that they have 70% of that market, but everytime I try to tie their annual units to a number like the 900 million heads (prior post by Stitch I think) I get a goodly variance. Be that as it may, HTCH is the 100lb gorilla dominating this essential niche for some years now.
TSA (trace suspension assembly) is simply a new suspension product with the electrical "traces" from head to drive electronics "integrated" with the suspension. Conventional method for connecting head to DE has been fine (really fine) wires. Another super MN niche company called Innovex has a lock on that particular market somewhere in the 70% range. They have developed a flex connector (HIF) to replace those. All of this is driven by MR uping the head wire count from 2 to 4 taken with smaller heads providing less connection space plus new direct bonding techniques like ultrasonic and ball bonding. Its the same forces at play as we've seen in IC packaging for years and years.
Near as I can tell, HTCH actually builds up the trace structure on some special flexible dielectric substrate and then bonds it somehow to a suspension. Precisely how that differs from the INVX HIF flex may be not much more than an arbitrary choice of acronyms. In both cases we are looking at photolithography and etching technologies.
Essentially what happens is that the end assembly task by the HSA producer is considerably simplified, a significant amount of labor
disappears, and you get some reliability and technical performance benefits. HTCH adds value and jumps its asp and margins....hopefully.
The TSA road so far has been rocky. HTCH said 2 million/week by cal97 ending....they actually went out doing more like 300-400k. Said TSA would be breakeven by then.....actually still losing their shirt. But they are currently chugging along over 1 million and rising and as long as they don't stall they will be just fine. Near as I can tell, TSA is a 200+ million bet, which is what you call "betting the farm".
To the extent that INVX and HTCH are on a collision course, I personally think HTCH has a compelling advantage just because they make the suspension. Of course they have to produce in order to realize it. But INVX is not to be ignored. They have done a phenomenal job penetrating the wire market and managing their capital. Flex connector/packaging technology goes well beyond disk drives and they will find opportunities. In the meantime, they have their HIF flex product going into Seagate's Cheetahs. That is no small thing.
HTCH stock takes huge somewhat artificial swings when apparent demand
outstrips supply. Happens on a fairly regular (in years) basis and its just the nature of the beast.
Best Regards....Tom |
