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Technology Stocks : Disk Drive Sector Discussion Forum

WDC 153.96

+0.7%

Nov 19 3:59 PM EST

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To: Frodo Baxter who wrote (5201)	1/9/1999 3:56:00 AM
From: Stitch	Read Replies (3) of 9256

Lawrence, Folks, OK OK. So HTCH could be playing some games. Like you have pointed out, they wouldn't be the only one. Let me share with you a couple of things that do concern me more however. I do not think HTCH intends to pay down debt with their offering. That isn't what they say they are going to do anyway. So Mark, no. I do not expect them to reduce debt. From their release: <<HTCH said it will use the net proceeds from the offering for general corporate purposes, primarily capital expenditures related to expansion of TSA suspension assembly capacity. What HTCH is going to do is take on Fujitsu which is making noise about selling CAPS. No time for conservation of the balance sheet. Time to belly up to the bar. Forget flex on suspension. Forget about INVX. This is about wireless. The only way to go in the future. HTCH is very right about that one. Last estimates I saw on Fujitsu suggests they are doing 8-9 million a month fully automated coil to coil for their CAPS. Nitto is almost coil to coil, although they have a bit higher labor content but so what. How many millions in Asia want to work right now? (Nitto Denko is currently the supplier to NHK on wireless for MKE/Quantum). Nitto and Fujitsu both use the same polyimides and virtually the same processes, so the final product is almost identical. This offers a duel source if Fujitsu really goes ahead with a component strategy as they yield product that is virtually transparent at the drive level. HTCH uses a panel process with their TSA and cannot go coil to coil as they have the subtractive process that requires reactive ion etching in plasma chambers. HTCH buys material from Mitsui Toatsu in Japan (sole source) and the Mitsui process is almost identical to the first half of Fujitsu and Nitto's processes (ie: adding up layers). Mitsui can swing either way. IMHO this additive process could very well be superior to HTCH's subtractive process as it is easily modified to go to dual layer circuits in the near future, whereas the TSA process cannot. Maybe this is why I am hearing that Fujitsu wants to add more capacity for CAPS. I think if I had been smart enough to buy HTCH when Z told us to, I would be selling right about now and sending him a case of his favorite brew. Then I could have avoided this rubbing of my nose in reality at the hands of the maestro. (LK I mean). I would be busy lighting cigars and sipping from my own case. <G> Best, Stitch Best, Stitch

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