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Technology Stocks : CRUS, good buy? -- Ignore unavailable to you. Want to Upgrade?

To: The Gambler who wrote (6978)	6/13/1999 5:13:00 PM
From: Synapsid	Read Replies (1) \| Respond to of 8193

I just came across this article on single-chip disk drive solutions (including Cirrus' 3CI), which was already posted on June 1. However, there did not appear to be any discussion of the contents of the article. ebnews.com The article has several quotes from a Cirrus marketing person. The article virtually confirms ("Japanese disk drive maker") that Fujitsu is the customer that will use the 3CI solution this year. No other design wins for Cirrus are hinted at. According to the article, a large number of semiconductor companies, including relative newcomers to the disk drive market, are trying to put together integrated single-chip solutions for disk drives, including Siemens (Infineon) and NEC which already have secured support from major disk drive manufacturers. Quantum is said to have a full-blown in-house development team working on a single-chip design. The pricing for the 3CI chip is said to be $10 or below. After reading this article, I am getting a more negative picture of Cirrus' prospects for hard disk drive silicon products. Apparently, its enormous head start on competitors with the 3CI architecture has failed to produce more than one major customer (so far). One customer isn't bad (4 million * $10 = $40M/quarter) but there is/was so much potential there. Still, if they get more customers it could still be a big hit. Another note from the article (which could be construed both as a positive and a negative) is that Cirrus is "hustling" to get its 0.25 micron 3CI product out of the door. This brings up a new kind of fab issue -- is it possible that the changes in fab strategy forced upon Cirrus are having a disruptive effect on chip designs? It is conceivable that Cirrus has been forced to use new fab/processes for smaller geometry (0.25, 0.18) designs, different from the fabs (e.g. MiCRUS) that they might have been planning to use. Another possible issue is capacity in the face of Cirrus' drastic reduction of "captive" capacity. Cirrus has an agreement with TSMC, but with that foundry running at full capacity there could be some doubt in the event that Cirrus experiences increased demand.