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Technology Stocks : QUANTUM -- Ignore unavailable to you. Want to Upgrade?

To: William T. Katz who wrote (4799)	11/11/1997 12:55:00 AM
From: Jon Tara	Respond to of 9124

Some interesting commentary in today's Infrastructure daily notes. (See infras.com for info on subscriptions to this excellent newsletter.) The article was primarly talking about how the highly-competitive marketplace for drives and the move to MR would be beneficial to Ultratech Stepper (UTEK) They are pushing sales of their new Model 1800 pole-trimming machine, which they say can reduce the cost per part from 0.10 per head to 0.01 per head. Relevant here, though, was a table provided by UTEK projecting production of various types of heads through 1999. From this chart, it appears that GMR is not a big near-term threat - they are only projecting the shipment of 1000 units in 1997, 125,000 in 1998, and 1,020,000 units in 1999. This is against shipment of 35,724,500, 26,483,500, and 22,765,200 inductive thin-film heads for 1997, 1998, and 1999, and 46,449,000, 78,126,500, and 83,759,200 units of MR heads for the same years. So, by 1999, we have GMR representing only 0.95% of the thin-film head market! UTEK is in a good position to make this projection, as they have a 95% market share with IBM, SEG, and QNTM, and 80% across the industry. If IBM wants steppers, they'd better have given UTEK the right numbers! :) For a long-term position, a hedge of long UTEK/long QNTM looks attractive. The more pitched the battle among the drive makers becomes, the more there is in it for UTEK.