Article from San Jose Mercury News, 12-4-96 Page 1 Business Section
IBM has 25.8 share of Disk Drive Market and intends to sell 22 million
units in 1998. They say they have technology to improve disk capacity.
Perhaps AMPEX KM technology.(?) Article didn't say what technology.
IBM pumps up hard-disk operations
With $1.3 billion investment, Big Blue wagers
it can stay on top of volatile industry
Published: Dec. 4, 1996
BY MIKE LANGBERG
Mercury News Staff Writer
International Business Machines Corp. is making a $1.3 billion bet that it can continue as one of the two dominant
manufacturers in the turbulent business of hard-disk drives.
On Tuesday, IBM said it is allocating $440 million to expand worldwide operations of its San Jose-based Storage
Systems Division, on top of commitments of $500 million in March and $380 million in July.
The money is going for new manufacturing capacity, including a facility in San Jose that IBM says will be the world's
largest disk-drive production plant when it opens in early 1997. The company also will build a plant in Thailand, with
production set to begin in early 1998.
''This is one of the faster growing businesses in the IT (information technology) industry,'' said James Vanderslice, the
division's general manager. ''And we have technological leadership.''
IBM, which leads in disk-drive sales, and its only big competitor, Seagate Technology Inc. of Scotts Valley, are trying to
stay on top of an industry marked by constantly falling prices and constantly surging storage capacity. Seagate, which
acquired rival Conner Peripherals Inc. of San Jose in February, and IBM together accounted for just over half of the
industry's $27 billion in global sales last year, according to the Mountain View research firm Disk/Trend Inc.
''There's only one way to grow in this industry: You have to be there early with new product designs,'' said James N.
Porter, Disk/Trend president.
Vanderslice declared IBM is meeting that challenge, and is a year to 18 months ahead of its competitors in packing
more data onto hard-disk platters.
Disk drives are already a big success story for Big Blue. IBM invented the hard disk in San Jose in the 1960s, but only
sold drives to its own computer divisions until 1994. Now, outside customers account for 60 percent of sales in the
Storage Systems Division, which has 5,600 employees locally.
Vanderslice said IBM's goal is to double sales from 11 million units this year to 22 million units in 1998. IBM is the
leading producer of high-end disk drives for mainframe computers and servers, as well as small-disk drives for
portable computers, but isn't a major supplier of hard disks for desktop personal computers. |
