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

To: Frodo Baxter who wrote (6163)	4/27/1999 8:18:00 PM
From: Mark Oliver	Respond to of 9256

<How can you possibly ignore all the warning signs about accelerating areal density, more low-end units, fewer components, emanating from EVERY company in this business? This year, there will probably NEGATIVE unit growth in heads, plates, and suspenders. Doesn't that scare you? It scares the heck out of me.> Yes, declining component usage is scary. What is interesting about Hutchinson is that they have the opportunity to take back market share. The conventional suspension has very small margins and a lot of competitive companies can make it. The TSA suspension is much harder to duplicate. I believe this gives Hutchinson an advantage over the competition that is very valuable. Clearly we're seeing mass adoption of TSA. At the moment no one is making any impact with another product. This gives Hutchison little bit of room for profit. And best of all, TSA is still in the early stages of success. It will only get better and there's opportunities said further value to the product in the future. And yes, the fact that they had such a wildly successful secondary offering is great for the company although perhaps not so great for the people who bought in. So while we agree that the market for component suppliers is very tenuous, clearly Hutchinson is the best positioned company of the lot. I think it's a good buy in the low 20's. Regards, Mark

To: Frodo Baxter who wrote (6163)	4/27/1999 10:38:00 PM
From: Z Analyzer	Respond to of 9256

<< How can you possibly ignore all the warning signs about accelerating areal density, more low-end units, fewer components, emanating from EVERY company in this business? This year, there will probably NEGATIVE unit growth in heads, plates, and suspenders. >> I certainly would not say that I am ignoring something which is receiving so much attention. Your view is influenced heavily by the reporting of read/write, Western Digital, quantum, Komag, etc.It's not clear to me that disc drive heads, plates, and suspenders will be down this year when one factors in the higher growth in the server market were Hutchinson has a considerably higher market share than in the desktop. To have a truer picture, one would need to factor in the Seagate, IBM, and quantum high end drives where platter counts should not be dropping. However, your focused on one of the very few negatives in an otherwise very bright picture. Even on the desktop, with Maxtor now going with TSA on all future programs, its beginning to look more like a clean sweep for TSA. In its only a matter time before video content begins to move platter counts in the low end drives upwards. Besides, this end of quarter inventory management is a reality. Aside from the Hutchinson's specific factors, quantum stated in their call that they averaged 3 and one half weeks inventory during the quarter but ended at three weeks. I imagine their customers also pushed inventories down in quarter end. With the greatest focus ever on inventories, everyone's trying to look good. -Z