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Technology Stocks : Hutchinson Technology, Inc. -- Ignore unavailable to you. Want to Upgrade?

To: Mark Oliver who wrote (1215)	4/21/1999 8:29:00 AM
From: Ron M	Read Replies (2) \| Respond to of 1487

Mark: CC notes It's been a hell of aday with EMC, QCOM and HTCH all reporting same day. I hope I don't shuffle the pages although I'd like to see HTCH do a QCOM trick. All, please make any corrections. Comments: Pleased with Q2 and TSA added Maxtor, improved productivity etc Visibility very short 6-8 weeks Demand looks flat---lighter across the board Revenue down, due to demand and price progression on TSA Margins depressed in Q3, Low supply chain inventory Decrease in cap ex to 150M In discussion with Fujitsu and Seagate Q&A: Believe market share is constant, perhaps some gains inTSA Confusion of demand going forward 149M units shipped Some pricing is tied to volume--no specifics provided They believe price progression on TSA has slowed They have seen greater weakness in notebook vs desktop They have received customer inquiries regarding significicant volume upswings but no contracts ASP was .98; .50 conv; 1.60-1.65 TSA Production: 40% TSA; 60% conv Exited Q at 12M/wk current demand is less than 12M Foresee upticks at end of Q3, more TSA than conv ASP drop of ,10-.15 in TSA 25% gross margin at Q2 exit Volume sensitivity will hurt Q3 margin Foresee 30% sustained margins in long term expect TSA to be the lowest cost product in market Re Fujitsu: pico caps work well, cost is an issue more amd more customers looking for tails. issues is electrical noise in high rpm drives. flex circuits with solder joint provide nodes for noise, as well as reliability issues and assembly cost concers. current no tails customers are asking for tail designs cap ex Q3 at 35M expect to spend more in Q4 for initial investment in microactuator and new programs 280M cash and investments --no buyback; use for microatuation and chip on TSA Seagate relationship never better, they are development partner, testing microactuation on TSA earliest product 9-15 months out. 47M inventory level no anticipated yield hits by the Japenese in converting toGMR 40% TSA with tails WDC 6 mos away from TSA drive In a hurry; havn't proofed. Ron