Adampak

[mrEngineer]

Please see the research paper link from yeokiwi on HDD vs SSD technology. The key message is clear. There is more room for expansion for magnetic storage than flash. Speed is not the issue but the size. Flash technology has always a problem to go lower than 90nm due to the law of physics (tunneling effects). Unless, semiconductor industry can think a better way to stack the dies or place it in a 3D shape or uses a brand new material like carbon nanotube which by that time would not even be called SSD anyway.

[Musicwhiz]

Please see the research paper link from yeokiwi on HDD vs SSD technology. The key message is clear. There is more room for expansion for magnetic storage than flash. Speed is not the issue but the size. Flash technology has always a problem to go lower than 90nm due to the law of physics (tunneling effects). Unless, semiconductor industry can think a better way to stack the dies or place it in a 3D shape or uses a brand new material like carbon nanotube which by that time would not even be called SSD anyway.

I read about a new material called Graphene. Could it possibly revolutionize the IT industry by making semi-conductors even smaller, like one layer of atoms only? Then Moore's Law would still be obeyed for many years to come.....

(Not Vested)

[mrEngineer]

Yes there are infinite possiblities of newer materials or concepts that would takeover Flash technology (Carbon nanotube, PCRAM, MRAM, some using atomic level programming, even chemicals or bio electronics etc - there are alot more that I have forgotten the names but I can look up my nanotechnology lecture notes if you are interested). But the problem is that what is talked in academics usually takes 10 years before it actualizes commercially. When I graduated in 2009, there were talks of PCRAM (phase change RAM) taking over the DRAM as there some positive light at the end of tunnel to resolve some problems. Until now, no news of success yet. I only realized that such new technologies only serve as fantasies when I joined the semiconductor industry in 2009 to learn that my ex firm is actually employing technology of 1997. So before Graphene can actualize commerically, I will not know when.

Secondly, there are always impediments for firms to carry out unnecessary capital expenditure. For e.g. lithography has been commonly debated to be end of life since the 90s but we have carried on to deep UV and ultra deep UV technology. And why? This is because one lithography machine costs 10 million and replacing it is requires sufficient production before it can recover. So if there is no clear industry trend, there will be no first movers. Especially if you going to change a material, there will be a need to change entire new set of equipments for that material. The implant machine may be different. The etch tool may be different. The thin film may be different. And all these difference will need $$$

That is why i mentioned the next few year trends should be in the backend technology when they try to place dies differently by stacking the dies or using a direct connection across the silicon wafer. However, there will always be the usual problems with wirebonding, cross talking of wires, epoxy, quality issues etc.

Anyway I have been out of touch with the electronics academia and industry for the past 6 months and if there are any major trends, maybe some others could be give better advice.

[freedom]

last time, LCD vs plasma. people think LCD can't be too big, today where is plasma?

SSD is much better than HDD. maybe SSD can't take over HDD yet, but we should not rule out the possibility.

[dydx]

While we can discuss about new technologies, we mustn't forget Adampak is merely a converter - through the processes of printing/coating and die-cutting - of different materials into useful precision labels and parts for the electronics (including HDD) and many other industries, following the proven trend of increasing use of all types of performance adhesives.

[mrEngineer]

last time, LCD vs plasma. people think LCD can't be too big, today where is plasma?

SSD is much better than HDD. maybe SSD can't take over HDD yet, but we should not rule out the possibility.

So how long did LCD took to eventually take over plasma? 1 month or 1 year or 3 years or 5 years?

dydx is right, Adampak can always leverage its expertise on labelling on other industries. It is not fully dependent on the HDD industry. Like the RFID route it is embarking on, it may be a popular thing in next few years.

[Some-one]

I'm wary about the placing my bets on a boost in business due to the mergers though. The article put up by sgmystique on the prev page seems to suggest that the main focus of the acquisitions may have been to access flash drive technology. As far as I know, I don't think Adampak supplies labels or die-cuts for flash drives yet, and even if they do, flash drives have no moving parts, so they would not require dampers would they?

And now that there will be less competition in the HDD manufacturing sector, I would think that a more oligopolistic industry would tend towards lower volume but higher prices. These higher prices may not filter through to the component manufacturers though, particularly for those components which comprise a small cost of the total hard disk cost.

In short, while management is prudent and balance sheet is strong, and of course the dividend is nice, I think that Adampak's industry may be facing poor prospects in the longer term. The poorer results this quarter may be more than a temporary blip. My feel.

Well, I did think about the industry as a whole for AdamPak before I invested. However, come to think about it. HDD is still the cheapest solution to storage and with companies all trying to cut costs to remain competitive, HDD would not die out unless SSD becomes more cheaper. Then perhaps that would be a time to divest AdamPak if it still cannot find anouther source of revenue.

Also, servers are still using HDD and not SSD. With the need to improve efficiency using technology and remain competitive, HDD would still remain the best alternative at this poin tof time.

[Drizzt]

the fact is that 52% of their revenue is based on HDisk.

i think no one actually have info on the ratio of consumer to enterprise harddisk demand

[bb88]

http://www.isuppli.com/memory-and-storag...ition.aspx

With its purchase of Hitachi Global Storage Technologies (Hitachi GST), Western Digital Corp. (WDC) will pad its lead in the global HDD market, giving it nearly double the market share of No. 2 supplier Seagate Technology LLC. With the purchase, WDC will claim 49.6 percent share of global Hard Disk Drive (HDD) unit shipments based on fourth-quarter totals, compared to 29.4 percent for Seagate. This will give WDC a lead of 20.2 percentage points over Seagate, up from a mere 2 points without the acquisition.

The Hitachi purchase will allow WDC to enter the critical enterprise HDD segment. WDC currently is only a marginal player in the enterprise HDD market, with nearly all of its sales going instead to the market for consumer drives, an area that includes products like desktop and mobile PCs, set-top boxes and video game consoles. Of all of the major HDD suppliers, Western Digital in the fourth quarter of 2010 had the smallest share of any company’s total shipments going to the enterprise segment, at less than 1 percent. In comparison, 65 percent of Seagate’s HDD shipments and 27 percent of Hitachi GST’s shipments went to the enterprise market.

“The enterprise HDD market garners significantly higher margins than the consumer segment, which makes the enterprise a fast-growing market for HDD revenue,” said Zhang. “To date, WDC has largely been absent from the enterprise segment. However, Hitachi GST brings WDC the essential technology, product portfolio and experience required to compete in the enterprise segment.” Hitachi GST offers both 3.5-inch and 2.5-inch HDDs with SATA and SAS interfaces, which are used extensively in the enterprise segment. The company has wide-ranging experience in this area, giving it the kind of track record required to win the confidence of enterprise customers, Zhang noted.

The WDC acquisition also may be a consequence of declining sales in the HDD market. HDD shipments in the first quarter of 2011 are anticipated to reach 160.9 million units, down 3.9 percent from 167.5 million in the fourth quarter of 2010. Shipments are being impacted by the rising sales of tablets, which don’t use HDDs and are cutting into the shipments of mobile PCs, a major market for hard drives. Other factors are affecting HDD sales as well, such as declining PC shipments in all major markets due to the growing use of cloud storage. Amid weaker industry conditions, organic sales growth is more difficult to achieve, prompting HDD suppliers to engage in acquisitions to gain market share.

Cloud storage is a zero sum game IMO. It's simply transferring the demand from the consumer space to the enterprise. Even better, since cloud storage providers likely use more HDDs than consumers aggregated - redundant drives, timed replacements, etc.

[Nick]

I noticed that the label segment takes up nearly 2/3 of the revenue. I understand that SSD will not require adhesives etc since there is no moving parts but wouldn't it require the use of labels as well ? It must be noted that the label segment posted a gain in revenue in 1Q 2011. Will appreciate forummers insights

(Not Vested)