Seagate Technology - Fundamentals Message Board

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Technology Stocks : Seagate Technology - Fundamentals

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To: Robert Douglas who wrote (274)	12/3/1998 8:23:00 PM
From: Frodo Baxter	Read Replies (2) of 1989

Dear Pollyanna, Here's the problem. You're assuming that the variance in secular growth rate is the most important determinant predicting supply and demand. It isn't. It's the variance in areal density versus that predicted by Moore's law. This past year, areal density has increased 100% versus the 60% historical average. If next year, areal density only increases by 20%, we will swing from oversupply to undersupply in a hurry. If, on the other hand, it increases by 100% again... watch out. Therefore, boom/bust will continue until we get to a point where we can reliably predict the course of human achievement and creative destruction. The alternative option is to Intel-ify, commonly known as monopoly. p.s. on your question "How much thin-film head capacity is still around?" $177 million, but that's only because APM has adamantly refused to write it off, contrary to GAAP, despite the equipment having reached end-of-life.

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