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To: Dennis R. Duke who wrote (3160)	5/12/1998 12:42:00 PM
From: Dennis R. Duke	Respond to of 5058

New products come from R&D. When ASND was near its bottom their Treasurer told me to think about what their R&D spending might mean, and what products could possibly come from that spending. Well here from the 10-Q for the 3/31/98 RDRT results is the R&D section of the Management's Discussion & Analysis of Operations: RESEARCH AND DEVELOPMENT EXPENSES Research and development ("R&D") expenses were $23.9 million and $45.6 million for the three and six month periods ended March 31, 1998, respectively, a substantial increase over R&D expenses of $15.7 million and $30.6 million for the comparable periods in fiscal 1997. The increase in R&D expenses in absolute dollars for the current periods was attributable to increased development efforts in MR, Giant MR ("GMR") and emerging technologies to address the disk drive industry's rapidly changing requirements. From time to time, the Company has engaged in fully or partially funded R&D for certain existing or potential customers. R&D funding under such projects is offset as expenses are incurred. During the three and six month periods ended March 31, 1998, approximately $2.4 million and $4.3 million, respectively, of development funding was offset against R&D expenses [Someone is helping to fund this R&D - Anyone know who?]. Funded R&D for the three and six month periods ended March 31, 1997 was immaterial.[Whoever it was that was funding R&D, did not do it last year.] I see an increase in R&D of 52.2% for the quarter ended and 49.0% for the six months ended 3/31/98. $45,600,000, wonder what product announcements are coming??? Just an indicator of the future, IMHO, Dennis