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Technology Stocks : Disk Drive Sector Discussion Forum -- Ignore unavailable to you. Want to Upgrade?

To: Sarmad Y. Hermiz who wrote (7717)	1/6/2000 5:32:00 PM
From: Stitch	Read Replies (1) \| Respond to of 9256

Sarmad, <<From Maxtor's pre announcement a month ago where they forecast their loss to be 18c for the 4th Q, it seems they'll lose $20 million for the quarter. Divide by 5 million drives, thats $4 per drive.>> Just thought I would mention that my estimate for MXTR is 6.9 M for the Q. SEG is 10.4M and QNTM is 7.2M. The rest I dunno. <<raising disk prices by $5 will be a non event>> This brought a real moment of ironic laughter to me. I can think of several DD guys who would regard this as a bigger event then ...say...Y2K, or The SF earthquake, or...even the annual Sturgis Harley rally.<G> <<One question that I have and don't know how to find info is this. Of the marginal DD companies like Fugitsu, JTS, Samsung, Acer, etc.... Do they use GMR technology ? Is it a simple matter for them to convert to that, or does it require an expensive facility upgrade ? I wonder if the gradual dominance of GMR would drive a few vendors out of business ? >> Fujitsu is not one of the "marginal" companies in the sense that most analysts regard them as one of the survivors and they were among the first to market with MR and GMR programs. The have a huge built-in market and a strong OEM following especially in the 2.5 in. space. JTS is already gone, Acer doesn't make drives. Samsung...well...who knows? But the interesting question you pose is the issue of the cut over to GMR. In general, the equipment to make MR is the same as the equipment to make GMR. The dangerous difference is in yields due to much tighter head geometry specifications, much higher susceptability to ESD and contamination damage, etc. We are already seeing some of the fallout. (Yamaha's announced withdrawl, Samsung's quiet shelving of plans to make GMR heads, and Read-Rite's on-going troubles). I think we can assume that the transition to GMR is just one more pressure point. Price pressures, overcapacity, the conversion to the BTO model of PC distribution, the declining average head/platter count per drive, the rapid increase in areal density, the slow adaption of bandwidth, the lack of emergence of new killer apps, are some of the others. You mentioned oil and copper in a previous post about pricing behavior. If you think about it, commodity behavior favors big, rich companies doesn't it? It certainly doesn't favor financially crippled companies. So if your were going to allocate some of your precious investment dollars to the DD sector why would anyone pick WDC, or RDRT,or KMAG, or even MXTR? The answer is, of course, because hope springs eternal, and because in the technology sector in general, there is always the perception that the little guy can hit a home run. The problem is, as I see it, more often then not, there is no joy in Mudvile. Best, Stitch