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Technology Stocks : Western Digital (WDC) -- Ignore unavailable to you. Want to Upgrade?

To: William J. Leiby who wrote (7618)	11/14/1997 6:37:00 PM
From: Vanni Resta	Respond to of 11057

William Leiby: Ha! I like your modesty. You may not call yourself a "deep thinker" but you seen to know what is going on sure enough. You wrote: "How long can Fujitsu, Hitachi, and perhaps Maxtor (Korea) sell at or below cost as some are suggesting?" Well, I think this is a fundamental issue for WDC that remains unexplored in this thread. Sam gave part of an answer which was interesting. What I was trying to get at is: Do the people who run these companies with the excess DD capacity have the political connections to get backing from the government, or from their banks, via pressure on those banks from their friends/relatives in the government? If so, does this mean they will just rely on that state support, and be less likely to cut prices? Or if they have this support, will they be less likely to bite the bullet by shuting down the factories altogether? Writing off the production facilities would be good for WDC because it would wipe some of the excess capacity off the map. And if they lose implicit government backing because the IMF forces that to happen as a condition of the bail out packages, does that mean they will continue to cut prices even more to move a lot of volume in an attempt to get at least something out of their investment? I haven't seen these issues addressed in any of the DD reports I read from the major brokerage houses. I thought maybe there might be some Asian expert out there who could address these issues intelligently. I know I sure can't. Happy Investing! Vanni

To: William J. Leiby who wrote (7618)	11/14/1997 8:26:00 PM
From: Pierre-X	Read Replies (2) \| Respond to of 11057

Re: Alleged Dumping You said: >How long can Fujitsu, Hitachi, and perhaps Maxtor (Korea) > sell at or below cost as some are suggesting? Can you give me citations for dumping allegations against Hitachi and Maxtor? You said: >What of WDC? Will they be able to buy the license to Big Blue's > Giant MR technology? Dunno - but if so, they leapfrog the >competition. Bill, WDC is a modern company in the sense that they are almost totally un-integrated. They buy all their HSAs, most of their platters, and other drive components from various suppliers. __The value that WDC adds to the HDD is assembly and marketing. An unintegrated company like this has no interest in leapfrogging competition via technology -- they don't even have the ABILITY to do so. __In order for that to happen, their suppliers across the entire component list would have to develop GMR products -AND- sell them exclusively to WDC. Ain't gonna happen -- the supplier's own livelihoods depends on selling into a broad customer base. The only company that would be able to establish a lock on GMR in an attempt to technologically outpace the competition is IBM themselves, and IBM has shown that they have no interest in that (very wise, IMHO). In retrospect, the whole leapfrog idea was a Foolish speculation for Randy Befumo to make (pun intended <g>). __Furthermore, in the last technology transition WDC intentionally lagged the industry somewhat for a set of very good reasons that paid off for them. Ms. Braun suggested they MAY have stayed with TFI one generation too many but even now that isn't clear. Ciao, Pierre P.S. Add Paul Z. Pilzer, Burton G. Malkiel, and Geoffrey A. Moore to your list of required reading (the one that has Graham, Dremen, et al.) <g> These are writers that have profoundly educated me on various topics of modern business and economics.