SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Technology Stocks : INVX Innovex Comdex Winner !! -- Ignore unavailable to you. Want to Upgrade?


To: Kurthend who wrote (1952)12/28/1997 3:14:00 PM
From: Thomas Scharf  Respond to of 3029
 
I checked earnings estimates for physcal '98. Zacks says $2.58,
Baseline says $2.48 That yields a forward PE in the neighborhood
of 8.

Here are some interesting numbers from the Baseline report which I
find encouraging:

Key Ratios & Measures
5 Yr. Range Current
--------------------------------
P/E 7 - 74 8.9
Price to Book .6 - 8.9 3.7
Price to Cash Flow 4.5 - 25.6 8
Price to Sales .3 - 5.1 2.11
Return on Equity 14.9% - 55.7% 55.7%



To: Kurthend who wrote (1952)12/28/1997 6:16:00 PM
From: Mark Oliver  Read Replies (1) | Respond to of 3029
 
Kurt, while Doug's $2.00 estimate may seem a bit shocking, imagine the feeling of people who are not as interested in INVX as you and many of the other regulars on this thread. Basically, they see a storage industry in a downward spiral that may parallel the DRAM market. They may be wondering why anyone would ever risk putting money into any of these commodity businesses.

Perhaps when you look under the hood, you can see value that the normal investor isn't willing to look for, but in the end, share price is never based on value, but on supply and demand of stock. Of course, that gives you the title of value investor and that is probably the best long term profile.

My thinking is this. In the tech market, where is the hot stock? It would seem that in general, the whole group is down. Maybe this is a sign that things will get better, but who knows. I feel at some point, people will get bored waiting for the bottom and start buying on the feeling that Jan/Feb will be good. They'll look for old favorites that are badly down. Techs are to exciting to stay out of. Do you really want to own garbage companies and prison stocks?

Still, I feel that while most of the bad news must be out, it would still seem that we have a few more bad sessions before it gets better.

Best Regards,

Mark



To: Kurthend who wrote (1952)12/28/1997 6:27:00 PM
From: Mark Oliver  Respond to of 3029
 
I found this article from Seagate outlining the challenges and rewards of their new Cheetah Disk Drive running at 10,000 RPM. Obviously, Seagate feels this program is very important to their effort to remain the leader in Enterprise.

So, what's the point? This is the same program that is the first to announce using Innovex's flex circuit HIF. Therefore, you can see that Seagate is thouroughly behind Innovex's technology.

Anyway, here's the article: idema.org

and this is the site for very good source of information on strage in general.
idema.org

CHEETAH: THE CHALLENGES AND BENEFITS

By Dave B. Anderson, Seagate Technology

Over the past several years, a few milestone developments have improved the performance of disk storage by step functions. The 5400-RPM 5.25" drive and the 7200-RPM 3.5" drive each in turn established a new standard for high performance storage. The introduction of the first 10,000-RPM drive promises to offer the next major improvement.

The Challenges of 10,000 RPM
When it was decided to develop the 10,000-RPM disk drive, it was obvious that several challenges had to be overcome. The two biggest were reading and writing at higher transfer rates and managing the spindle speed.

" Reading & Writing: Data rates increase, for a given BPI, in proportion to the spindle speed. This presents new challenges for both LSI design and head/media integration. The movement to MR heads introduced additional challenges. While a thin film head benefits from higher linear velocity (it receives a stronger signal), the signal from an MR head is insensitive to velocity yet the noise continues to increase as a function of higher speed. Therefore, a higher amplitude signal must be achieved in order to compensate for the increased noise.

" Spindle Speed: The development of the 7200-RPM Barracuda spindle revealed that not only power dissipation but also lubricant life, vibration, and acoustics had to be well managed. At 10,000-RPM, the bearings run about 10ø C hotter. The higher temperatures cause the lubricant to lose viscosity and to accelerate oxidation. The bearings also travel about 39% farther each year making for wear concerns.

Higher Transfer Rates

To meet the needs for higher effective amplitude, a dual stripe MR head was employed. Because the differential characteristics of the head produces a stronger read signal, the signal to noise ratio was greatly improved thus enhancing the margin when reading data.

Managing 10,000-RPM
Experience developing the 7200-RPM underpinned the development of the Cheetah in two ways: life testing the components and the development of analytical models and analysis techniques. Determining the necessity and the best approach to life testing of the components led to the development of analytical models and analysis techniques. These, in turn, were adopted to assess the effects of 10,000-RPM.

Since no one had previously attempted a 7200-RPM disk spindle, there was a question of whether acceptable spin motors were available. This was not the only complication. Even if this could be developed, a major hurdle would be to convince the customers that there was no danger of the spindle motor wearing out due to the higher RPM. However, by the time this product was shipping, the dependability of its spindle had been demonstrated convincingly. Most importantly, a great deal was learned about what it took to validate a new RPM design point. This was directly applied in developing the plan for assessing 10,000-RPM spindles and components.

In fact, the spindle motor used in the 7200-RPM turned out to be fine for the higher RPM. It had been used in commercial applications up to 20,000-RPM - though not with the same tolerance requirements. While other 7200 components proved to be inadequate for 10,000-RPM, the spindle used was more than suitable for the task.

Life Testing Components
Nothing proved more valuable during 7200-RPM development than a rigorous program established for life testing components, particularly spindles and bearings. This testing revealed several changes needed for a 7200-RPM motor to last five years.

Life testing at 10,000 revealed that while many of the 7200 components would work in this environment, others, including bearings and lubricants would have to be changed significantly. In some cases, however, no modeling or analysis could have revealed the needed changes.

The results from evaluating lubricants is a good example. It is well known that key to its usefulness is the high temperature viscosity of the bearing grease. Early testing indicated the grease being used for 7200 was not adequate. From the greases evaluated, the ten most promising candidates were submitted to life testing. This empirical work disclosed an interesting fact - due to other characteristics, the grease with the highest viscosity at high temperatures was not the best choice for the 10,000-RPM disk spindle.

Life testing in most cases involves running identical sets of devices at several different accelerated temperatures so that trends can be extrapolated. For example, in one set of tests each combination of spindle, bearing and grease was run at 50, 60 and 70 degrees Centigrade with bearing temperatures reaching over 85 degrees. This was done with the 7200-RPM to develop a wear model which field experience proved to be quite accurate. The same process laid the foundation for the 10,000-RPM wear model.

An interesting aspect of the spindle testing is the inspection process. For one series of tests, two spindles were removed each month and torn down to look for wear symptoms. The inspection process included:

ÿ

<Picture>

Figure 1: Acoustics vs accelerated run.

ÿ

1. Visual assessment of wear

2. X-ray for surface and subsurface fatigue and defects

3. Surface characterization

4. Measuring run current - looking for increased friction

5. Measurement of non-repeatable runout - looking for any increase

6. Acoustic measurements

7. Lubricant chemical analysis, looking for weight loss, antioxidant presence, and amount of oxidation.

The final results of the acoustic analysis with the final configuration spindle are shown in Figure 1. Acoustic measurements are a method used to assess any change in the bearing friction. An usual increase is an early indicator of a wear condition. The other phases of the inspection process were measured against similar criteria. Figure 1 shows that the Cheetah spindle has no worse acoustic increase than the field proven Barracuda 2LP (several million have been shipped without having a spindle wear issue).

Among the new technologies evaluated were hydrodynamic bearings (HDB). They seemed to have some desirable traits, such as lower acoustics. However, the life testing had shown some definite problems. While considerable progress has been made in HDBs, at the time a component decision had to be made they were not suitable for this application.

ÿ

Modeling and Analysis of 10,000-RPM Mechanics
Several models were developed for analyzing the effect of higher RPM during testing of the Barracuda HDA. After some preliminary testing, modifying these for 10,000-RPM was not a difficult task. This proved invaluable for saving design time.

A secondary benefit of the 7200-RPM spindle design effort was that it led to the development of a strategic relationship with lubricant vendors. Forging a strong relationship with these vendors facilitated much of the design changes for 10,000-RPM. This relationship proved particularly helpful because it not only provided the opportunity to obtain early access to the latest lubricants, but it also opened up the laboratories to a more in-depth exchange of information. Changing the composition of several of the grease components, especially the soap and antioxidant, turned out to be critical to the success of the 10,000-RPM design.

The Result: Cheetah
Early responses from customers confirm that the 10,000-RPM drive will set a new standard for high performance magnetic storage. While this article has focused primarily on the challenges specific to the 10,000-RPM, there are other innovations in this drive. The most interesting, from a performance perspective, is a technique for improving seek performance. During actuator movement, the servo system is alternately reading positioning information off two different surfaces. This doubles the servo bandwidth by having twice as many samples to employ in positioning. This feature benefits the acceleration and deceleration profiles of the drive. This, combined with a new, very short suspension, makes for a drive that has an excellent latency and transfer rate as well as the fastest seek performance.

The understandable presumption is that a 10,000-RPM drive will be less reliable than a drive with a lower rotation speed. This is, in fact, baseless. What we have learned through past designs, such as the Barracuda, is that by introducing new technology - even when it consumes more power - can actually result, with a thorough and creative design effort, in improved reliability. There is every reason to expect that a 10,000-RPM drive will have as good a reliability record as the best 7200-RPM drives, if not better (Table 1).

ÿ

------------------------------------------------------------------------

IMPROVEMENT

ÿ

Low Profile HDA: 51%

Half-Height HDA: 24%

Acoustics are the same as the latest version of the 7200-RPM drives (4.3 bels sound pressure). Test data and bearing life analysis show Cheetah life equivalent to or better than Barracuda. Vibration and shock sensitivity are less.

ÿ

ÿ

PERFORMANCE BENEFITS OF 10,000-RPM

ÿ

Focused on benefits that pertain specifically to spinning at 10,000-RPM. There are two that obviously accrue:

Increased Data Transfer Rate

Reduced Latency

ÿ

ÿ

To complete a read-modify-write sequence, one or more sectors must be read and rewritten on two different disks, the parity drive, and the data drive. Each of these involves an average latency plus another full rotation in order to rewrite to the original location. Here is a comparison of just latency times for this operation.

ÿ

ÿ

Locate Data

Rewrite

Total

Improvement

10,000-RPM

2.99

6

9.99

28%

7200-RPM

4.17

8.33

12.50

ÿ

Table 1: Comparison of 7200-RPM and 10,000-RPM.

------------------------------------------------------------------------

Which leads us to answering the question on everyone's mind. Where will the customers see the advantage of this higher performance?

" Increased Data Transfer Rate: Video processing gets lots of headlines but more mundane work, like data mining, can equally profit from this high data rate. For instance, a workload of random 64K transfers of typical data mining show about a 30% advantage over the 7200-RPM drives. The longer transfers of video applications, 256K and above, will reveal even more dramatic differences.

" Reduced Latency: Almost every I/O operation involved some amount of latency, the rotation time waiting for the desired sector to arrive under the read/write heads. In operations with little or no seeking, the benefit will be more pronounced. All applications will see some benefit from the improved latency. But there is one application where the latency really stands out: RAID 5 disk arrays. RAID 5 is the preferred array organization for business applications. One performance penalty associated with this parity arrangement is the updating of a small amount of information. (A small amount being less than the amount of data comprising an entire parity stripe). The updating requires reading the old data, using the old and new data to update the parity information, and writing the new data.ÿ

The Market for 10,000-RPM
When the first 7200-RPM drive was shipped, it was expected that only relatively small segments of each systems market workstations, servers, and mainframes would adopt it. However, it turned out that essentially every computer manufacturer placed 7200-RPM drives into their product line. In some cases, such as desktop PCs, it was only a small percentage of the systems. In others, like file servers, it quickly became the standard for storage. Overall the 7200-RPM drive dominated the mainstream high performance (SCSI) market within two generations of its first appearing.

What does that say about the prospects for 10,000-RPM and who will benefit from its performance advantage? That is easy - Everybody!

Dave B. Anderson is the director of systems storage architecture at Seagate Technology's disk drive division located in Bloomington, Minnesota.



To: Kurthend who wrote (1952)12/28/1997 9:09:00 PM
From: Douglas V. Fant  Read Replies (1) | Respond to of 3029
 
Kurt, No no inside knowledge. When I invest in stocks, I look at a reasonable worst case. If we get intro a cycle ofanalysts writing down earnings, then just like analysts err on the optimistic side when estimating earnings moving forward, they also tend to "overshoot" on the downside when reducing estimates too. So I base my decision on whether to buy/not buy INVX based on this scenario.

Now look at Note #8333 under the WDC thread- it notes that while there is oversupply in hard drives due to new entrants into the market, and price per unit is thus dropping, nonetheless, demand for hard drives is strong and growing. And as the price drops per unit, the laws of supply and demand should help stimulate sales further.

Now assuming that INVX earns about $2.00/share and only grows at about 60% of the rate that it currently predicts or about 14-15% annually, then a fair price for INVX would be about $28-30/share currently.

My conservative analysis thus suggests that INVX has about a 40% upside, and assuming that the recent low of $18 7/8ths holds if there is a retest, about a 10-12% downside risk. And indeed current option premiums seem to confirm that rough ratio- about a 3.5-1 upside ratio.

So no I like INVX a lot- I just feel that we need to invest not just based upon our outlook on the market but upon what may be the likely general perceptions too....And INVX appears to pass that test too...

Sincerely,

Doug F.