(Nikkei BP Group)
(No.1 High-Tech News Site in Japanese)
| Seagate Sees Revival in Disk Drive Market
October 29, 1998 (SINGAPORE) -- Following a slump and then a consolidation
in the disk drive industry since last year, there now are some signs
of a pick up, Seagate Technology Inc. said.
|Following the release of the major disk drive maker's first quarter results,
its senior vice president for international sales operations Joel Stead
said last week that "demand is definitely picking up compared to the
first six months of the year."
At the same time, Singapore's Trade Development Board showed that shipments
of disk drives jumped 12.2 percent to S$1.73 billion in September, despite
the 1.2 percent fall in overall domestic electronics exports for the
same month. In terms of a three-month moving average, disk drive exports
registered a sharp growth of 10.5 percent in September compared with
a 8.2 percent gain in September.
In a teleconference for the press from the company's international headquarters
in Paris, Seagate's Stead said the company did well in the desktop segment
of the market, although the high-end portion remains competitive.
"We're not sure if there is a turnaround yet, but there is a change in
the past four to six weeks. There is a shortage of a few products,"
Stead said. "Hopefully, October-November will be strong. We expect this
year's end of the year sales to be equal or better than last year's."
The company reported a net loss of US$30 million on revenue of US$1.55
billion in the quarter ended September compared to a net loss of US$240
million on revenue of US$1.90 billion a year earlier.
Stead said Seagate hasn't experienced any unusual adverse impact in its
Asian operations as a result of the regional slump. Sales from the region
still account for 15-16 percent of group revenues, consistent for the
past five quarters.
He said the Singapore plant, which is the cornerstone manufacturing facility
for the company, has been ramping up production, but he declined to
give specific numbers. Sales of fiber channel high-end disk drives,
which are made in Singapore, were 25 percent higher in the September
quarter than in the previous quarter, Stead said.
"Hopefully, if supply and demand are starting to equate themselves across
the board, there is no reason for predatory-type pricing," he said.
Stead also said Seagate hopes to improve gross margins in the current
quarter from a 21 percent average for the quarter just ended.
In the desktop market segment, Seagate enjoyed good growth and continued
to do well, he said. There was a significant shortage in the 2GB, 3GB,
4GB segments, especially the 3GB and 4GB segments. The sub-US$1,000
PC market is now driving this business, he said.
But in the high-end segment, competition continues to be tough. "In the
high-end segment, things are looking up...(but) pricing continues to
be competitive," Stead said. Most of the pressure has been in the 4GB
and 9GB segments.
(Joseph Rajendran, Asia BizTech Correspondent)
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