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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Bridge Player who wrote (52199)	8/24/2013 3:08:47 PM
From: Woody_Nickels	Read Replies (1) \| Respond to of 78753

Yes, WDC is well positioned in the SDD market. A few years back they bought an SDD manufacturer, or was it a NAND flash manufacturer? Prior to that the HDD makers were in deep trouble, with their primary product becoming obsolete. Today, a 'hybrid' disk drive is likely the key product, where the SDD keeps frequently accessed data, while the HDD stores long term, infrequently accessed data. One problem of SDDs is that they do have limited read/write cycles, although with proper controller management routines the life of the SDD appears 'extended' somewhat. SDDs do wear out, eventually. Woody

To: Bridge Player who wrote (52199)	8/25/2013 5:16:04 AM
From: IndependentValue	Read Replies (1) \| Respond to of 78753

Yes I believe it is a longer-term risk that SSDs will replace HDDs in many, but not all, applications in the future. I do not see SSDs replacing HDDs in non-mission critical enterprise storage servers for example, as it is simply not necessary – HDDs provide sufficient and economically better value storage solutions in this regard. But yes I believe that PCs (both desk and noteboos/ultrabooks) will all use SSDs eventually. But the transition will take time, and be bridged by ever-improving HDDs and hybrid drives which I believe will gain significant traction due to the cost advantage. SSD remain 8x - 10x more expensive than HDD, and there is an insufficient supply of SSD (due to flash memory commodity component) vs. sustained high growth in data (requiring storage) which means that continued demand for HDD and the newer hybrid SSHD will be strong, benefiting WDC, while they continue to build their own SSD business, leading to your second question. With regard to WDC’s positioning within the SSD segment, they have what I believe is a nascent presence compared to companies like SanDisk. They have made a number of significant SSD-related acquisitions since 2009 as well as having developed their own SSD technology in-house, and already manufacturing a range of SSD products. They also manufacture new hybrid drives which won’t have been reflected in the latest results but should start to see significant sales in coming quarters. I believe their market dominant position in HDD, strong operational and management track record, and very strong balance sheet will allow WDC to successfully grow and transition the business into an all solution (HDD/SSD/hybrid) storage business that caters to all market segments, in what is a secular high growth market.