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

To: Sam who wrote (1753)	12/11/1997 2:43:00 PM
From: Pierre-X	Read Replies (2) \| Respond to of 9256

Re: Crazy Asians I think one place where they have erred is underestimating the blistering pace of technology advance in DRAM and hard disk, two businesses where they have lost their shirts and socks. Where they go from here of course I am not privy to. I'll throw some thoughts out to move the discussion along though . . . *** As CEO of SILISMURF, I have observed substantial production cutbacks on the part of the major players, particularly the industry leader WaterGate. I view this as partial capitulation. In fact this is great news -- it can only benefit me for the other, dominant players to cut production. Due to my currently rather small market share any production cuts from me will have negligible impact on the current ugly situation. I will continue to produce as long as I can maintain positive gross margin, since any kind of marginal profit I can pull in will help me offset this huge huge depreciation from the plant investments I've already made. But without technology upgrades my gross margins will inevitably shrink to zero ... and then I'll be out of the game. I've given up on my dreams of global SILISMURF domination; I can see that it's a shitty business anyway. Now I just wanna make a few bucks so I dont get sent to the guillotine. I am praying for the big guys to keep cutting production and stabilize prices and do it fast fast fast. The future is now really out of my hands. PX, CEO SILISMURF INC. -- SHIRTLESS (I lost it today)

To: Sam who wrote (1753)	12/11/1997 4:05:00 PM
From: Pierre-X	Read Replies (1) \| Respond to of 9256

Sam, lets talk about this question of overbuilding on the part of the existing players. It's key to the whole issue. IF -- the big three have NOT overbuilt, then things are going pretty much according to Fujitsu/Maxtor/Samsung plan. They've factored the price plunge into their plans and events are merely unfolding as anticipated. Even so, liquidity to survive and ramp the next generation is not assured. If -- as I posit, the big three HAVE overbuilt, the the Asian DD guys are getting hurt, and are vulnerable. The best long term strategy for the big three should be to keep their capacity online, even go bonkers and ramp more production. Push prices down, down, down, to KILL the enemy. Unfortunately this won't happen, shareholders will whine too much about the consequent 2-3 quarters of big bleeding. CEO of WDC William Haggerty's own words "We will not participate in absurd pricing to maintain market share" in the 1Q98 CC. It's not clear if the big three even have the liquidity and cash reserves themselves to undertake such an aggression. PX (Shirtless, sewing some fig leaves together)