Welcome to AsiaBizTech Web Site

Top Page
Site Map
News at a Glance Member Services AsiaBizTech Resources

Advanced Search

(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)

    <Visit News Center for more Asian news.>

    Copyright © 1997-98
    Nikkei BP BizTech, Inc.
    All Rights Reserved.
    Updated: Wed Oct 28 18:49:27 1998 PDT