Here is my fear:
HMTT has worked hard to get the 2.1 and 2.8 programs up and running. By going forward with the 3.4 and higher stuff, they are cannabilizing their older products.
I guess the qualification cycle is about 3 months. So, with inventory problems still in the industry, pricing pressure is still really bad and not improving.
By going to the 3.4, a 9 gig drive just got 1.5 platters (plus heads = about $30) cheaper than a 2.1 based drive. So manufacturers have incentive to move to higher density stuff continually.
but with the inventory glut (yeah, some say its lessening, but I don't see it yet), there may be a TEMPORARY but severe correction at HMTT's expense this coming quarter as their customers STOP ordering more costly drive components and move to qualifying the cheaper stuff.
Herb Greenberg's WDC comment (affect upon HMTT revenues) sounds accurate.
AS the Tech leader in platters, HMTT is doing great. But you are only as good as your production equipment. Intel is leading because it has economy of scale and productivity way beyond its competitors (except IBM).
I fear we maybe reaching IVAC production limitations? All I've heard of density is 3.4 gig limit. Maybe there is more to be squeezed?
Anybody know?
I heard of the 7.2 GMR product, but don't know the details.
So, anyway, I'd expect HMTT to be weak in the next month or so, until the conference call, and maybe 1 month after. Still think its an 18 month triple from here, but risk to downside of $8 is higher today than 2 weeks ago.
BL |
