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Technology Stocks : Applied Magnetics Corp -- Ignore unavailable to you. Want to Upgrade?

To: Gus who wrote (11009)	12/12/1997 8:33:00 AM
From: T Bowl	Read Replies (1) \| Respond to of 12298

Gus -OFF TOPIC <<I don't follow the media guys closely because they all have been beaten down. Any ideas of where the shortfalls are going to be? >> You read my mind. See: exchange2000.com Sales to WDC last Q were: KMAG $65mil HMTT $16mil STMD $0 Word was from STMD's Stephen Lowe this Q that WDC looked like they were trying to spread the business. Also, if you read the latest KMAG CC summary: komag.com you can see that their TFI sales to WDC were very strong. These 1GB and 1.3GB platters are perfect for the KMAG inline equipment to produce. Lots and lots of them at cheap prices. It doesn't surprise me that they get these sales. They expected that to be boosted by the MR sales(2.1). All of that rev was going to bring KMAG back to profitability this Q. As I said before, I believe the WDC cutbacks are TFI products. KMAG ASPs were about $11.5 last Q. Canceled production using ~3.6mil platters = $40mil worth of expected media purchases has potentially dried up as you said. If WDC sold 6mil DDs last Q = 18mil platters = ~$200mil in media purchases WDC in their last CC said they made 37% inhouse which leaves 60% = $120mil to outside suppliers. (Rough of course). Surely WDC wouldn't idle their capacity so I would imagine they would cancel orders from outside suppliers. So KMAG supplies roughly 50% of the media purchased outside of WDC, HMTT about 15%. Either my #s are wrong, or I can't acct for around 35% in media sales to WDC. Don't know where that comes from or where my #s are wrong... HMTT claims(FWIW) that they supply more to the high end at WDC and haven't seen much slack there(although I'm not sure how much I believe IR depts anymore). Even If WDC cut ALL of HMTTs purchases that leaves someone with a reduction of around at least $25mil in expected sales this Q. My bet is that KMAG will see that hit. Their earnings expectations have not changed in the last 6 weeks. I think we will see either revisions or that KMAG will announce that they will in fact have a loss for the DecQ. todd