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

To: Mark Madden who wrote (5308)	1/22/1999 4:45:00 PM
From: Sam	Read Replies (1) \| Respond to of 9256

Mark, It wasn't just the factors that you listed. It was also the switch to BTO by their primary customers (PC vendors), and the effective entrance/re-entrance in to the market in a significant way of MXTR, Fujitsu, IBM and, to a lesser extent as far as I can gather, Samsung. The then "Big Three" didn't take the latter companies seriously enough, and therefore didn't push the density curve quickly enough to keep their share of the market. I don't know about others, I'm know that I could not have predicted that on my own, ahead of the actual occurrence of the infamous event in the fall (both senses of the word) of 98. Some people came on the thread and said that this was possible, that DDs were commodities, things would get more competitive and prices would drop, and that was always a possibility that was acknowledged by many of us (I am especially thinking of the "much loved" Vanni Resti who has now apparently disappeared from these threads who said some of these things in spring 98, then in the summer said that she had been wrong when several of the stocks kept going up, and finally after the fall in the autumn claimed her earlier genius). But no one as far as I know--on this thread or not--predicted when that would actually occur, or who would do it. You put down your money, you take your chances, and you go with the flow. Best, Sam

To: Mark Madden who wrote (5308)	1/22/1999 5:33:00 PM
From: Stitch	Read Replies (1) \| Respond to of 9256

Mark, <<The Asian crisis forcing some companies to dump inventories at any cost At any rate, demand fell, companies became inefficient, and stock prices dropped, even though technology soared to increase drive performance at incredible levels.>> I want to take an exception to this notion in the following sense. Asia has never been a huge part of the DD consumption chain. And the fact is, Asia consumption never really fell off as predictions said it would. Nevertheless that didn't stop some executives from crying "Asia" The only real Asian crisis in the DD industry was the oncoming freight trains of Fujitsu, Maxtor-Hyundai, and Samsung. Those forces are still with us and exerting the same levels of pressure if not more. I might add a couple more to your list of things that clobbered the DD industry. (I agree with your notion that this was the worst downturn but will broaden the scope to 28 years). That is the shift in the PC distribution model to a JIT based, Build to order model ala Dell. This left the DD guys with a serious adjustment to inventory and asset management as well as selling channel management issues. Secondly the areal density curve heated up, exceeding even the axiomatic Moore's Law with the migration to MR heads. This was no mean challenge and those that flubbed it, (WDC, APM, and to a lesser degree RDRT) paid a heavy price. I am curious about something you mention. << I noticed the semiconductor book to bill ratio (considered a lagging indicator) peaked in February 97 and bottomed in October 98.>> In terms of the BTB being a lagging indicator did you mean in ref: to Disk drives on a correlation of some kind or as it relates to its subject semi conductors? Many thanks for your well considered comments. best, Stitch