Seagate hit by component famine
It's gonna last well into March 2001
Seagate, the world's biggest HDD drive company, today said it would be unable to meet all customer demand because of a components shortage. It expects this to continue for at last well into the start of 2001.
Charles Pope, the company's chief financial officer specifically referred to unfulfilled demand in the Pacific Rim.
The problems will have a knock-on effect on the revenues as the traditional declinines in unit prices will not be countered by better sales. Pope also said that the price of a hard drive had dropped more than average this year - ten per cent as opposed to the usual eight per cent decline.
The company said that Asia has been noticably affected by the shortages. The region accounted for 26 per cent of total sales revenue last quarter, but that had fallen to 22 per cent this time round.
To offset the drop in revenues the company is cutting costs by reducing the number of employees. Six months ago Seagate employed 59,656 people but by the end of the quarter ending in September, this number had been slashed to just under 57,000.
Despite all the doom and gloom, the company's results for Q4, ending 30 September, were not too shabby. Net income was up from $2 million to $75 million, or 31 cents per share for the same period a year earlier. Shipments stood at 11.6 million drives, also higher - by 13 per cent - than a year ago. ®