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Technology Stocks : Read-Rite
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To: Dennis R. Duke who wrote (3089)5/8/1998 6:25:00 PM
From: Stitch  Read Replies (1) of 5058
 
Dennis;

isn't the IBM/WDC a letter of intent to license technology?

Among other things, yes. It is intended to cross license intellectual property and "know-how" as well as provide contractual terms for exchange of actual product.

Does that preclude RDRT from manufacturing for WDC under said license for WDC's exclusive use?

Since RDRT isn't a party to the agreement I am not sure I understand this question.

Aren't JBL, SLR and other working now under this type of model?

No, not the same thing at all. Jabil and Solectron do not get technology rights to the products they manufacture for their customers typically.

Do license agreements end up passing technology to OEM's to produce?

Depends on the specific agreement but, if I understand your question, the answer would be yes, usually. It may be easier for you to think of license agreements providing the "use" of technology to produce a product.

Does IBM have the capacity to produce if WDC switches its orders from RDRT to IBM? Would IBM need to buy said capacity?

I don't know IBM's total capacity or the specific volumes called out in the agreement but I suspect that IBM will have the capacity required to support the agreement. IBM is currently expanding production in China and already has significant capacity in Singapore, Thailand, and elsewhere.

Best,
Stitch
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