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Technology Stocks : Read-Rite -- Ignore unavailable to you. Want to Upgrade?

To: T Bowl who wrote (2757)	1/7/1998 10:03:00 PM
From: Gus	Read Replies (1) \| Respond to of 5058

Todd, From the 10K .....Read-Rite SMI was a supplier for Quantum/MKE on certain previous MR programs, Read-Rite SMI is not currently a supplier on Quantum/MKE's 2.1GB per 3.5" disk programs. Though Read-Rite SMI will continue to seek qualification on Quantum/MKE's 2.5GB per 3.5-inch disk programs due for production in the third quarter of fiscal 1998, there can be no assurance that Read-Rite SMI will be successful in regaining market share at Quantum/MKE.... For some reason I seem to recall that QNTM was a customer for RDRT's 1.3 GB MR and 1.6 GB MR head programs. It's not a major point, though. I'm frankly not too optimistic about the head suppliers because not only do they face intense competition from the currency-advantaged Japanese independents, but they also face equally intense competition from IBM and SEG who are increasingly forced to participate in the merchant head market to extend the useful lives of their MR heads. Given the way that PC product cycles have compressed which in turn compresses the disk drive product cycle, the integrated drive players have to figure out a way to prolong the commercial life of their heads to take advantage of the improvement of yields (and margins) as a function of time. IBM, for example, is basically using NEC as a contract manufacturer so it can continue to generate at least some kind of income from its trailing-edge MR heads while it ramps its leading-edge MR heads. Gus