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Technology Stocks : Disk Drive Sector Discussion Forum -- Ignore unavailable to you. Want to Upgrade?

To: Stitch who wrote (3039)	4/25/1998 5:23:00 AM
From: shane forbes	Read Replies (2) \| Respond to of 9256

Stitch: Re: But I do not believe that means prices will stabilize I disagree. I think fundamentally: after all the one-time demand-capacity distortions (JIT inventory, Asia currency devalutaion etc) have been absorbed and I hope we are nearing the end of this, then once cap. exp. has fallen to a sufficiently low level, since unit demand continues to be robust, after a lag of a few months (because new add-on cap. ex. does not immediately produce revenue) capacity will not be enough to meet demand. ---- To wit prices will stabilize. (the "lag" is why I said "n/t" and not "now" in my previous post ...) This is the logic I use in the semi-industry and I do not see why it does not apply here as well. It certainly works for the cement industry!!! ---- (Again, as implied in my previous post, the big bugaboo here are the new competitors. I don't suspect demand is large enough for everyone at this stage and this is not a great situation. But here's to hoping that demand continues to rise. Come to think of it don't the top 4 companies control about 80% of supply (from one of the annual reports). Likely changed by now. But if the some of the little companies continue to suffer and have exited then there's a (small) reduction in available capacity there. A tiny silver lining.) ---- Come to think of it there is yet another fundamental shift that might wreck a lot of parties even (if) after the prices do stabilize and that is a drive for the sub $799 PC market and I guess next year the sub $499 market. Some one will have to absorb the higher priced drives. Maybe Win 98 will drive even greater demands for fat applications and counter the above to some extent (don't think so but hoping)... ---- Shane.