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Technology Stocks : EMC How high can it go? -- Ignore unavailable to you. Want to Upgrade?

To: dennis michael patterson who wrote (4162)	2/2/1999 6:12:00 PM
From: gyzniwa	Respond to of 17183

Tuesday February 2, 5:20 pm Eastern Time Company Press Release SOURCE: NationsBanc Montgomery Securities LLC Disk Drive Industry Will Bounce Back Strongly in 1999 After Terrible 1998, NationsBanc Montgomery Analyst Tells Investors SAN FRANCISCO, Feb. 2 /PRNewswire/ -- The following is being issued by NationsBanc Montgomery Securities, a member of the National Association of Securities Dealers, CRD number 26091: The disk drive industry should rebound in 1999 from a terrible 1998 that saw industrywide revenues drop by almost $2 billion, according to Paul G. Fox, a data storage industry analyst for NationsBanc Montgomery Securities LLC. ''Last year was one of the worst years in the history of the disk drive industry with demand shocks and excess supply leading to dramatic product declines. In 1999, I expect to see robust revenue growth of more than 20 percent compared to last year's decline,'' Fox said. Fox's comments came at the 16th annual NationsBanc Montgomery Securities Technology Week Conference. More than 1,600 professional money managers and company executives are attending Technology Week '99, where they will hear presentations by 162 public and 56 private industry-leading companies, including Amazon.com, Cisco Systems, Hewlett-Packard, Intel, National Semiconductor, Oracle, PeopleSoft, Quantum, SAP America, Seagate Technology and Sun Microsystems. Fox noted that while total shipments of disk drives rose 14 percent to 139 million in 1998, total revenues fell 7 percent to $25 billion, reflecting the intense pricing pressure that affected the industry last year. In 1999, Fox is forecasting unit growth of 25 percent to 174 million units and revenue growth of 21 percent to $30.3 billion. In 1999, Fox expects technology improvements to overtake price-cutting as the dominant driver of industry revenues. Among the technological changes Fox is monitoring are the switch to giant magneto-resistive recording heads from magneto-resistive heads; a move from wired suspension assemblies to wireless assemblies or trace suspension architecture (TSA); an increase in disk speed to 10,000 RPMs for drives in enterprise servers and 7,200 RPMs in desktop machines; and continued dramatic increases in storage capacity. Among disk drive related stocks, Fox is currently recommending Seagate Technology, the industry leader. Fox is forecasting market share gains and accelerated growth for the company in its high-end products, which account for 40 percent of revenues but 70 percent of profits. Fox also is recommending EMC Corporation [NYSE:EMC - news], which manufacturers storage arrays and related software. The company is experiencing strong demand and its customer base includes 90 percent of the Fortune 100. Fox said that Maxtor Corporation [Nasdaq:MXTR - news], another recommended stock, is the fastest-growing disk drive supplier and is driving the industry's storage capacity growth rate by achieving 100 percent annual increases in capacity. The company has a blue-chip OEM customer base, including Dell Computer, IBM, Compaq and Hewlett-Packard, Fox said. Fox also recommended two component suppliers: Hutchinson Technology, which has a dominant market share in suspension assemblies and is the leading developer of TSA; and Komag*, a high-capacity, high-performance leader among disk suppliers.