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Technology Stocks : Seagate Technology

STX 275.39

-1.7%

Dec 31 4:00 PM EST

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To: John Chen who wrote (5101)	6/10/1998 10:29:00 AM
From: Robert Douglas	Read Replies (2) of 7841

Re: Western Digital's woes. From my seat on this roller coaster, the problems in the industry trace their origins to the long period of good times we have recently had. This period of profitability for the HDD industry saved several marginal producers from the jaws of bankruptcy allowing them to become fierce competitors. This renewed competition has resulted in excess capacity and the recent unprofitability we are currently experiencing. With this Darwinian viewpoint in mind, the problems being reported by Seagate's competitors are good news and, hopefully, soon will result in a contraction of the production of HDDs. Seagate, IMO, is most well suited to ride out the bad times and stands to reap the benefits of this process of natural selection.

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