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

To: LK2 who wrote (3537)	6/7/1998 10:31:00 PM
From: Gottfried	Respond to of 9256

Larry, you said >If the chip industry slump can last longer than originally forecast [snip] why can't the same thing happen with the disk drive industry? < I'm assuming and expecting it will. GM

To: LK2 who wrote (3537)	6/8/1998 9:46:00 AM
From: Sam	Respond to of 9256

Larry and GM, "If the chip industry slump can last longer than original forecast...why can't the same thing happen with the disk drive industry?" Well, it could, but read the article you posted: "This time around, demand remains relatively healthy. Unit shipments of all types of computer chips are up substantially. The trouble is, overcapacity and falling Asian currencies are forcing semiconductor producers to slash prices." As long as demand remains robust, there is hope. But in the chip sector, there are more and bigger companies vying for share. Harder to get supply/demand in balance. More consolidation, bankruptcies, cutbacks required. And later in the article: "Even though some companies have been mothballing chip factories, chip production is increasing because of more efficient manufacturing, Carracino said." There isn't the same increase in efficient manufacturing in drives as there is, and will be, in chips, as the chips get smaller and smaller, and wafer technology gets better and better. Chips and disks serve the same market, and have some of the same characteristics, but it would be a mistake to think that they are exactly the same. They aren't. Drives could conceivably prosper as chips continue to fall, and vice versa. Same as heads and media companies could conceivably prosper and drive vendor companies suffer (or vice versa, as I think is more likely over the next year or two), depending on the dynamics of the competitive landscape in each sub-sector.