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Hitachi Introduces New Firm, Hard Drives

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Less than a week after its acquisition of IBM’s hard disk
drive operations closed,
Hitachi wasted little
time in christening the new company it formed with IBM’s wares.

Tokyo’s Hitachi Monday formally announced its majority-owned Hitachi Global
Storage Technologies and unveiled a few new hard drives along with it,
including a one-inch Microdrive that houses four gigabytes of data. The San
Jose, Calif. concern also introduced an enterprise-class hard disk drive
and a 1.8-inch hard disk drive, suited for mobile applications.

The major coup is the Microdrive, Hitachi noted, because it was forged with new miniaturization technology. The drive will use miniaturized
components, including a new read-write head that is half the size of its
predecessor and results in a 40-percent decrease in the height at which the
head travels above the disk platter.

Hitachi claimed this feature is analogous to a “Boeing 747 airplane flying
one millimeter above the surface of the earth.” The new head technology,
called the femto slider head, is equivalent in size to a grain of table

Hitachi said its engineers have also increased the tracks per inch to
accommodate the Microdrive’s areal density of more than 60 billion bits of
data per square inch, which was created by using a five-layer version of
Hitachi’s patented “Pixie Dust” media technology.

This was achieved by taking a three-atom-thick layer of the element
ruthenium, a precious metal similar to platinum, and sandwiching it between
three magnetic layers. The ruthenium/magnetic layers enable data recording
at extremely densities while keeping data intact. Hitachi said the new data
transfer rates are faster than all competitive solid-state data storage
products available today.

Bill Healy, general manager, Mobile HDD Business Unit, Hitachi Global
Storage Technologies, said the Microdrive’s capacity is targeted for
multimedia or other data-intensive applications that need to be accessed via
a handheld device. For example, such technology would make possible the
tough task of watching movies or listening to music on a handheld gadget — with high quality and little interruption.

Slated to be available in the fall of 2003 at prices to be named later, the
4GB Microdrive is designed to the CompactFlash Type II industry standard. HP
and Kodak are among the firms gauging the Microdrive for use with their
products, including HP’s iPAQ Pocket PC and Kodak’s digital camera line.

The 15,000 RPM Hitachi Ultrastar 15K73 is Hitachi’s newest high-end
server-class hard disk drive, and is geared to excel in taxing
data-processing environments. The 3.5-inch drive comes in a top capacity of
73 GB in an industry standard 1-inch hard disk drive “z” height. The 15H73
packs high areal density with antiferromagnetically coupled (AFC) media and
fluid dynamic bearing motors (FDB).The Ultrastar 15K73 will be available in
both Ultra 320 SCSI and 2 Gb FCAL interfaces in the first quarter of 2003.

Lastly, the firm unmasked a new 1.8-inch hard disk drive which, like the
Microdrive, is suited for a variety of mobile applications. The Travelstar
Compact Series C4K40 is available in 40 and 20 gigabyte capacities, and is
compliant with the SFF8111 standard. This means the HD is a good fit for
laptop computers, tablet PCs, handheld computers, portable consumer
electronics and other pervasive computing devices. The new drive will be
available in April of this year.

Despite the buzz Hitachi created around its Microdrive one-inch form factor, it is in the 1.8-inch category that hard disk drives are seeing the most momentum, according to Gartner Dataquest Vice President John Monroe.

“The 1-inch drives are doing okay, but the 1.8-inch form-factor has been doing surprisingly well,” Monroe told “One key OEM account is the one Hitachi has with Apple’s iPod, which uses Hitachi’s 1.8-inch drive. Ithas exceeded my expectations in terms of how many have shipped.”

Monroe said products such as the wildly popular iPod aren’t using the one-inch HDDs, but that isn’t to say it couldn’t happen in the future.

“One of the problems is the microdrive has been stuck at 1 gigabyte for three years,” Monroe said. “And now Hitachi wants to skip two gigs and go straight to four. The 1.8 inch drives have gone from 2 Gigabytes to 20 gigabytes in that time.”

As for Hitachi’s new high-end Ultrastar drive, Monroe said the outfit is struggling to gain ground on HDD rivals Fujitsu and Seagate, which have been ahead of Hitachi in terms of developing enterprise-class HDDs. But, Monroe said, Hitachi has given every indication of desiring to be a long-term player in the HDD sector.

“They’re willing to accept the 10 to 20 percent return-on-investment that is typical in hard disk drive operations,” Monroe explained. “IBM was no longer willing to do that. IBM looks for at least a 50 percent return-on-investment.”

Though the disk storage systems market has been praised as one of the few bright spots for its hardiness in a challenging economic environment, market research firm IDC said it doesn’t expect an “imminent” recovery for the disk storage systems factory segment, whose sales were down this past quarter.

The disk storage niche posted sales of $4.7 billion in the third quarter of 2002, down 3 percent from the second quarter of 2002, according to IDC.

“The failure to gain revenue momentum in Q3 is yet another indication that a rebound in the disk storage systems market is not imminent,” said Charlotte Rancourt, research director of IDC’s Disk Storage Systems program. “The third quarter is consistent with an emerging trend whereby growth in gigabyte per unit does not offset the unrelenting decline in dollar per gigabyte.”

Hitachi Global Storage Technologies is 70 percent owned by Hitachi, with the
remaining 30 percent held by IBM. Hitachi, will assume full ownership at the
end of 2005. Hitachi first announced its intent to purchase IBM’s struggling
HDD drive operations last June for $2.05 billion. The deal closed December
31, 2002.

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