Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Zitel-ZITL What's Happening -- Ignore unavailable to you. Want to Upgrade?

To: doug doan who wrote (12697)	11/6/1997 7:28:00 PM
From: Marconi	Respond to of 18263

Doug: Hutchinson Tech. conference call earlier this week (was 1-800-633-8284, #3282617) had this last quarter down due to a drop in enterprise disk drive demand, which I believe they expected would extend for another quarter. HTI has the largest market share for one of the necessary components that go into enterprise drives. My understanding is the enterprise disk drive demand is relatively flat now, instead of the 30+% growth rate in recent years, due to drive makers trimming excess inventories. This would suggest Zitel CASD might be along for a similar ride, with a possible pickup in demand in January expected at this time. This assumes relative weakness in enterprise demand at this time, too. Components can be used in as little time as a few days after manufacture, so turns can be quick. If I recall HTI keeps $20-30M inventory for 400+M annual sales, and considers that a tight inventory. To me, this indicates drives are manufactured from new components on average in less than a month, so the relative flatness the last 3 months and expected the next 3 months suggests that at the CASD level, Zitel is likely to experience flatness, too. Therefore relative weakness in CASD demand seems to be a reasonable assumption. Does this seem to follow, or am I missing something? Best regards, MDR