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

To: La Traguhs who wrote (4602)	10/1/1998 7:31:00 PM
From: Z Analyzer	Read Replies (1) \| Respond to of 9256

<<I hear rumblings that the RDRT FOS suspension is in conflict with the Hutchinson TSA patent pending filing.>> That's news to me but I guess it would be good news. Actually most TSA patents should have been approved long ago so this must be a later improvement. Z

To: La Traguhs who wrote (4602)	10/2/1998 12:23:00 AM
From: Mark Oliver	Read Replies (2) \| Respond to of 9256

<I hear rumblings that the RDRT FOS suspension is in conflict with the Hutchinson TSA patent pending filing.> Could be but when you see 3 versions of FOS, and 3 versions of laminated circuits, you have to wonder if they are all in violation of patents. Not likely, but... Hutchinson's TSA uses an IBM patent which they have paid for and Hutchinson holds patents of their own for added ideas. Another TSA like circuit comes from Nitto Denko and NHK which is called CIS. NHK has paid IBM for use of their patents, but not Hutch as I understand. Still, I don't think the 2 techniques are the same. Fujitsu has a method they call CAPS. They've used it internally for 3 years. I think CIS is more like CAPS. If it means anything they all employ the same materials, but TSA uses an etching process and CAPS use a sputtering process to make the copper circuits. Magnacomp says they have right to make CAPS and plan production in China. They also can purchase TSA from Hutchinson, as can NHK and supply customers who want TSA. It's not the most profitable, but... FOS is a technique that has no stainless steel base which is the flexure on TSA like laminated circuits. FOS needs a special suspension with a flexure and then they bond to it. Read Rite , Innovex and 3M all make flex circuits. Innovex had 75% of the market when it was based on 2 wire TFI heads. Transition to MR cause the need for 4 or 5 wires. Scale, increased wires and precision makes wires impractical. TSA has been very successful getting at least 7 programs with IBM, Quantum, Toshiba and Samsung. They said last I heard they were qualifying for an additional 22 programs, but they need to be able to fulfill orders and up until now they've not been able to ramp production. TSA claims to hold better qualities because the built in flexure is suppose to be more precise. There seem to be trade offs in both methods. FOS is certainly less expensive. It has also been easier to bring into production and holds gross margins over 40%. TSA has been loosing a lot of money and costs more. Innovex has been successful with Seagate in programs like the Cheetah. I understand 3M has also got some circuits going to Seagate. They hope to sign Maxtor soon. It is questionable whether Read Rite has any qualified programs but they are surely trying. If they do get some work, they should get around 35 cents and if they have good processes, they can have a reasonable margin. As an added value to their head and HSA operation, it makes sense. RDRT has some origins in this work coming from Tessera, a very interesting venture in chip packaging in which they have an equity stake. RDRT wants to develop their flex business for this coming market for chip packaging as does Innovex. It should be a much larger market than wiring drive heads in 2 or 3 years. So, Hutchinson blocking RDRT via patent infringement could happen, but really there are more companies involved than these 2. Somehow I doubt it. If you hear more, please let me know. Regards, Mark