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Seagate to 'shut US plants'

1000 jobs at risk

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A US financial analyst expects Seagate to announce the closure of one or two US plants by the end of May, predicting 800 to 1000 redundancies.

The target at Seagate is to drive its quarterly operating expenses below $300m, according to Stifel Nikolaus analyst Aaron Rakers. This will be achieved, he thinks, by shutting down one or two US plants, which will achieve a faster operating expense reduction than closing overseas facilities. There could be up a thousand employees laid off as a result.

Rakers also considers that Seagate has caught up with Western Digital and other competitors on small form factor areal density, with 320GB/platter capacity levels being reached. An announcement of 2.5-inch products with 320 and 640GB capacities could occur in the third quarter of this year, with shipments in the fourth quarter or very early 2010.

Seagate could also introduce a lower cost 2.5-inch drive for the netbook market in the second half of this year.

Seagate SSD

Rakers confirms a belief that Seagate will enter the enterprise flash memory solid state drive (SSD) market in competition with the leading SSD supplier in this market, STEC. He thinks that Seagate could be utilising technology from SandForce as it develops its own controller technology. This technology can, SandForce claims, more or less equalise SSD read and write speeds, and make multi-level cell (MLC) flash reliable enough for enterprise use. Dr. Chong Park is a SandForce board director and also a board director at Seagate. ®

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