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To: Stitch who wrote (7065)	1/16/1998 11:55:00 PM
From: Gottfried	Read Replies (3) \| Respond to of 9124

Stitch, the Forbes story on HTCH peaked my interest, especially since the TSA suspensions fetch $1.60 vs $0.60 for regular ones. The assumption I make is that for the near future the number of suspensions per drive does not shrink. So, a simple minded pro- jection would be that revenue should grow 1.6/0.6 times the anticipated DD growth. In reality I know nothing about TSA yield and price pressure from the DD makers. Maybe they'll only pay $0.80 instead of $ 1.60 by 2000. And, as you point out, there is no profit as yet. But management expects the bulk of revenue - 85% - to come from TSA by 2000. TSA is then estimated to become 75% of unit volume. Implied is that they WON'T get $1.60 then. (85/75=1.13 i.e. only a 13% premium over conventional suspensions) The story also says that earnings for this quarter will probably be negative [you noted a 34 cent loss] on sales of about $90M. Problems: startup costs from the new suspensions and a pause in demand. Yes, there is time to wait a while. GM