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

To: Z Analyzer who wrote (5011)	11/23/1998 11:55:00 AM
From: TEMFASSBAL	Respond to of 9256

Z, You Write <<However, I believe that the optimistic scenario is that if HTCH is hitting these kinds of numbers and dominating wireless production, selling TSA flexures to their competitors and sampling proprietary microactuation, that a 12 p/e may be way low.>> You're not the first person I've heard argue the merits of a P.E. expansion and I do believe it's possible. On the other hand I never count on those (expansions) when trying to figure price appreciation potential. As I believe there's a decent chance we'll get 50-100% from here over the next 3-6 months any P.E. expansion will be gravy. <<Add in the growth in PC sales apparently resulting from a greater price elasticity than previously assumed, an Asia economic recovery and the beginning of a very exciting trend in home video storage and there exists a possibility that HTCH could become a "hot " stock.>> I agree with all you've said here and will add the Y2K "problem" as another reason PC sales will grow at a larger than expected clip in '99. IMO you're going to see a growth in corporate systems rollover at a rate higher than expected (BTW I like CPQ here also for some of the same reasons). This could lead to poor comps in the 2000 vs 1999 year (for the PC industry) but those are worries for another day...I believe we have a couple of Q's of pretty nice #'s ahead. Tim

To: Z Analyzer who wrote (5011)	11/23/1998 3:30:00 PM
From: Mark Oliver	Read Replies (1) \| Respond to of 9256

<To me, it is not insignificant that none of HTCH's competitors have yet been able to qualify a wireless suspension during a time when some drives are literally not being produced due to lack of them. Nor that all their competitors have programs to develop wireless suspensions using TSA flexures purchased from HTCH.> Fujitsu uses CAPS, exclusively. This is a proven, and perhaps expensive technology which surely competes with Hutchinson's TSA. Fujitsu is liscensing this technology to Magnecomp and they intend to produce it in China. They also buy TSA flexures as you say because they only care about selling what the customer needs as long as they can make money. They will convert customers at any opportunity. Then you also have CIS produced by Nitto Denko and sold in conjunction with NHK. This product is going into Quantum drives and I would suggest that it could be a (distant) second source for nearly all TSA programs. And then you have Innovex and 3M selling into Seagate. I don't know what other companies 3M sells to. Of course, we can continue the merits discussion of TSA vs a flex circuit, but it's pointless. I agree that Hutch has the product of choice, and the only thing holding them back is ability to ramp production which is improved. Anyway, it is untrue that competitors are unable to qualify from what I've been able to gather. Second, I believe the one thing we can agree on is that PC sales will not be normal over the next 18 months. That could be favorable or not, I don't know. I've been asking this question for the last year and nobody has the same answer. So, I think the market in general is at risk and that makes me nervous. Probably HTCH could trade to 45, but I don't see it as an undervalued no-brainer. I wait for another leg down and hope I'll be brave enough to buy it. Regards, Mark