Silicon Investor (SI) -- The First Internet Community

STOCKTALK

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 : Western Digital (WDC) -- Ignore unavailable to you. Want to Upgrade?

To: Randy Ellingson who wrote (8528)	1/28/1998 4:31:00 PM
From: Chuck Bleakney	Respond to of 11057

I just saw a news blurb that said theres a class action suit by investors starting up. The law firm involved has a web page at: cmht.com The original news message is at: bud.stocksmart.com Just an FYI. Chuck

To: Randy Ellingson who wrote (8528)	1/28/1998 4:57:00 PM
From: John Wang	Read Replies (3) \| Respond to of 11057

Randy: This price war and over-supply is as severe as previous one if I remember well. The previous over supply situation occurred some time around 1993. All HDD companies lost money for a few quarters. The over supply ended after 1.5 year or so. There is one big difference today versus 1993. There were much more HDD players during 1993. Today, there are about 11-12 players in the world. The top four control about 80% of the world market. The market continues to grow double digit due to strong PC growth and internet. I think that SEG, QNTM and WDC all expanded their manufacturing capacities in summer 97 anticipating great Christmas selling at the same time Fujitsu, Maxtor and Samsung did the same. From my memory of all news events, Seagate did the usual summer dumping of low end products first before Fujitsu and Maxtor bettered Seagate and took over the pricing game till recently. Maxtor was quite successful last year in time to market of their high performance desktop aided by their new ASIC chip strategy. It is hard to say when this over capacity will end. But, I think that it is going to be sooner than last cycle for the reasons stated above and the fact that Seagate is laying off people, closing facility, postponing facilitization of building. For the short term, WDC stock has no clear direction. It may re-test the low or it may break 20 depending on tomorrow's quarterly report and conf call. It will be nice for Seagate to buy out Maxtor and for Samsung to exit the business. For that to happen, Koreans have to feel that their precious cash for investment is better put in DRAM than this low margin desktp HDD business. If they don't feel so, they will continue to be disturbing factor for HDD business. At this moment, I heard from my friends of major Amercian semi equipment comapny stationed in Asia that they have temporarily stopped all purchase activities for semi equipment due to stranded cash position and unfavorable exchange rate. But, DRAM is considerd their prime business. If they lose it, they go back to stone age in terms of semi technology. They will not give that up. So, the precious cash has to be reserved for semi technology upgrade. As for HDD technology, WDC is there with strong competitors with 2.1G/platter drives from Gbytes/platter stand point. From total Gbytes/drive stand point, WD is lagging because WDC use three while Maxtor, Quantum, Seagate use maximum of 4 platters per drive. For SCSI drive technology, I think that WD is quite advanced with their 9G MR drives. They only use 6 platters to build 9G while the rest of players have to use 9 to 10 platters to build the same 9G. That means that WDC has better cost for these drives. Mumbo jumbo... I don't think that I address your questions. You can say that I am as confused. John

To: Randy Ellingson who wrote (8528)	1/29/1998 6:12:00 AM
From: Thomas Haegin	Respond to of 11057

Randy, on << What does the future hold, and when is it most clearly a good idea to invest in commodity producers? >> Well, I don't know what the future holds, but normally the best time to buy cyclical stocks is when their P/E is at historical highs and sell when P/E reaches historical lows. I still stand by my idea that Hyundai, Samsung will become rather marginal players as the technology is driven by the financially sound 3 U.S. manufactures plus IBM. Fujitsu is a good competitor also, I think. Also bear in mind that unlike SEG that has a big factory line-up to manage, WDC has only 3 plants world-wide: 2 in SGP and 1 in MAL, plus a media factory in CA that works at full capacity (I think, as WDC buys 60% of magnetic media externally). Thomas