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

To: Bert Kuo who wrote (1580)	11/17/1997 10:28:00 AM
From: T Bowl	Respond to of 9256

<<Hmm.. What is the difference between Read-Rite Corp. and Read-Rite SMI>> From the 10k.. STRATEGIC ALLIANCE WITH SUMITOMO In June 1991, the Company established a strategic alliance with Sumitomo, a leading Japanese industrial company, including an investment by Sumitomo in the Company and the establishment by the two companies of a joint venture, Read-Rite SMI, in Japan. Substantially all of Read-Rite SMI's sales in fiscal 1996 and 1995 were to MKE, a subcontractor to Quantum. In December 1993, the Company and Sumitomo invested an additional $2.8 million and $9.2 million, respectively, in Read-Rite SMI as part of a series of agreements pursuant to which Read-Rite SMI licensed from the Company the Company's MR technology, sublicensed from the Company the technology licensed from KME in the fourth quarter of fiscal 1993, and agreed to share with the Company certain ongoing MR technology research and development costs. The Company and Read-Rite SMI have also agreed to amend and restate their principal license agreement effective September 1996 to include additional technologies, including spin valve and GMR, and to eliminate royalty provisions. The Company and Read-Rite SMI have also agreed to a separate sublicense for planar technology providing for both a license fee and running royalties. Finally, the Company and Read-Rite SMI have agreed to an ongoing cost sharing arrangement allowing the parties to share equitably in their collective research and development expenditures. The Company has retained a majority voting interest in Read-Rite SMI; however, all material corporate actions require a supermajority of Read-Rite SMI's Board of Directors, and thus the consent of both the Company and Sumitomo. Further investments in Read-Rite SMI beyond current amounts are expected to be borne equally by the Company and Sumitomo.