Drive Maker Western Digital Corp Plans to Cut 2,500 Jobs

Western Digital Corp. said it would slash about 2,500 jobs, as falling demand for computers and electronics hurt disk-drive makers.
The company also lowered its revenue outlook for the current quarter. As a result, the Lake Forest, Calif.-based company said it plans to reduce production and cut operating expenses across the company.
Western Digital will halt most of its manufacturing operations from Dec. 20 through Jan. 1. It will also close one of its three manufacturing facilities in Thailand, and close or sell one of two manufacturing facilities in Malaysia.
Western Digital Corp (WDC.N: Quote, Profile, Research, Stock Buzz) said quarterly revenue would miss estimates due to weak disk- drive demand, adding that it plans to halt some operations during the holidays and cut some 5 percent of its workforce to trim costs.
Shares of the world's second-largest maker of computer disk drives fell about 3 percent on Wednesday after it said demand for hard drives in the second quarter that will end on Dec. 26 was "significantly below" expectations.
Western Digital forecast revenue of $1.7 billion to $1.8 billion for the period. Analysts surveyed by Reuters Estimates had on average expected $1.97 billion. In October, the company had anticipated revenue of $2.03 billion to $2.15 billion.
The move comes one week after rival Seagate Technologies (STX.O: Quote, Profile, Research, Stock Buzz) also slashed its outlook for the current quarter and said it will institute a temporary company-wide shutdown.
Analysts blamed the shortfall to weakness in the personal computer market, which like most other industries has seen demand shrink during the global economic downturn.
"Industry pricing is also significantly more competitive than forecasted," the company added in a statement.
To cut costs, Western Digital will halt the majority of its manufacturing operations from Dec. 20 through Jan. 1, reduce worldwide headcount by about 2,500 people, and pare compensation of its executive officers, board and senior management.
The company expects to complete the moves by March and to take combined charges of $150 million in the December and March quarters as a result. It estimated savings of $150 million annually.
"We believe this realignment is the appropriate action given current difficult conditions and expect we will see Seagate mirror WD's actions when it announces its own restructuring plan next month," analyst Avi Cohen, head of research at Avian Securities, said in a client note.
Western Digital's shares fell 25 cents to $12.25 on the New York Stock Exchange, while rival data storage company NetApp Inc (NTAP.O: Quote, Profile, Research, Stock Buzz) shares fell 5.7 percent to $13.63. Seagate shares edged 4 cents higher to $4.49.
Last week NetApp said it would close a product line that experienced unexpectedly low demand, and will close a facility in Haifa, Israel, which employs 51 people. (Reporting by Franklin Paul; Editing by Lisa Von Ahn and Maureen Bavdek)

Nanotechnology Milestone for Quadrupling Terabyte (3º) Hard Drive by Hitachi

Hard Drive 15/10/2007 04:01:00 Business Wire vertically-integrated research, design and manufacturing capabilities, Hitachi GST delivers leadership technology and quality to its global customer base.
With approximately 33,000 employees worldwide, Hitachi GST offers a comprehensive range of hard drive products for desktop computers, high-performance storage systems and servers, notebooks and consumer devices.
For more information, please visit the company s website at http://www.hitachigst.com.
Information contained in this news release is current as of the date of the press announcement, but may be subject to change without prior notice.

Hitachi Global Storage Technologies, the hard drive arm of the Japanese conglomerate, has made what it says is the world's smallest read head for hard drives.

And, if it comes out in 2011 or so as expected, the head will allow Hitachi to continue to increase the density of drives, said John Best, Hitachi's CTO. Current top-of-the-line desktop drives hold a terabyte.

With the new, elegantly named current perpendicular-to-the-plane giant magneto-resistive heads (CPP-GMR heads to you laypeople), drive makers will be able to come out with 4 terabyte drives in 2011 and/or 1 terabyte notebook drives.

The CPP-GMR drive essentially changes the structure of drive heads. Current drives come with a tunnel magnetoresistance head. In these, an insulating layer sits between two magnetic layers. Electrons can tunnel through the layer. Precisely controlling the tunneling ultimately results in the 1s and 0s of data.

Unfortunately, drive heads need to be shrunk as areal density, the measure of the amount of data that can be squeezed onto a square inch of media, increases. Shrinking the heads increases electrical resistance, which in turn creates electrical noise and potential degradation in performance. Past 500 gigabits per square inch of areal density, TMR heads may not work reliably. (Current top-end drives exhibit an areal density of around 200 gigabits per square inch.)

In a CPP-GMR head, the insulator is eliminated and replaced by a conductor, usually copper. Instead of running parallel with the middle layer, the current runs at a perpendicular angle. The structure reduces resistance and thus allows the head to be shrunk.

Put another way, current drive heads can read media where the tracks are 70 nanometers apart. The CPP-GMR heads will be capable of reading media where the tracks are 50 nanometers apart or smaller. Fifty nanometer tracks hit in 2009, and 30 nanometer tracks are expected to hit in 2011.

Before TMR heads, the industry used more conventional GMR heads, but the current in the older versions ran parallel with the insulating layer.

"In a sense, it (GMR) is making a comeback in a different form," said Best.

Earlier this month, France's Albert Fert and Germany's Peter Gruenberg won the Nobel Prize in physics for their discoveries surrounding giant magneto-resistance in 1988.

The first commercial drives with CPP-GMR head will likely come in 2009 or 2010.

Hitachi will present these achievements at the Perpendicular Magnetic Recording Conference next week in Tokyo.

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