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History (1990): US HDD Manufacturers Investing in Europe

Conner Peripherals, Maxtor and Quantum

At least 3 Californian companies, Conner Peripherals (San Jose, CA), Maxtor (San Jose, CA) and Quantum (Milpitas, CA) are about to establish Winchester drive plants in Europe this year.

Europe had slowly given up Winchesters. There still are the German company Siemens and the Scottish one Rodime that – keeps on transferring its production to Singapore. There are a joint venture between Conner Peripherals and Olivetti in Ivrea (Italy) and IBM centers in Mainz (West Germany) for research, Havant in England for 3.5- and 5.25-inch disks, Berlin (West Germany) for large 3380 and 3390 units, and Jarfalla (Sweden) for 3390 controllers. And that’s about all.

Most manufacturers, especially the American ones that are still ahead in the HDD market are now clouded by tomorrow’s unified Europe. They are determined to set foot there, not only by opening office and distribution subsidiaries, but manufacturing plants. They feel that they will be better off with their large OEM European customers if they bare the label “made in Europe”, even if final sales prices are slightly higher than those in their Southeastern Asian plants. Finally, the continent is beginning to really count in their financial figures.

Last year, sales in Europe jumped 125%,” said William F. Roach, VP sales, IBM, at Hannover’s fair.

HDD announcements were rather quiet, after the stormy ones in Las Vegas Comdex. last November. Traditionally. Americans choose their exhibition to unveil new products, when Japanese prefer the German fair. Most Japanese announcements concerned high capacity disks, in the 5.25-inch and more form factor.

They are summed up in the chart below.

In FY89, Quantum’s European sales reached $49 million, and they even raised to $70.5 million just in the 3 first quarters of Quantum’s FY90.

Conner, another actor in this expanding market, makes 30% of its sales in Europe.

The main problem is less a high-costing labor, balanced by a constantly more automated production, than a lack of basic European components (platters or magnetic heads, motors. electronic cards. etc.)

Precisely, by settling in Europe, we hope to help the development of new component sources,” says a spokesman from Quantum.

At 3 three big manufacturers have decided to open new plants in Europe this year.

Maxtor’s board of directors has officially taken the option to settle in an unknown country before the end of 1990.

Quantum announced plans for significant expansion of activities in Europe. The company has added six new distributors in the past 3 months, one in West Germany (now two: Addit Datensysteme GmbH and NeumOlier GmbH), in The Netherlands (P& T Electronics International BV), in Italy (Compril SpA in addition to AESSE SpA), in Israel (Wietec Ltd.), and two in Denmark (VT Data and SC Metric).

This brings to 18 the number of European distributors selling Quantum’s products in 13 countries, and more will be added in the next few months,” said Roach.

The firm is establishing an Amsterdam Distribution Center which will stock the disk drives for European market. It is scheduled to open this month.

In addition, the company has expanded its European Service Center, housed with Quantum’s HQ operations in Frankfurt (West Germany). On a long-term basis. this corporation has initiated efforts aimed at establishing a disk drive manufacturing capability in Europe. Under the direction of Ivan Nazario, VP of manufacturing, investigations are under way to define plans for those operations. Future plans for this facility also include local research, development and engineering capabilities.

Our goal is to accomplish this over the next 18-24 months, assuming we succeed in identifying the correct mix of sources,” said Roach.

As from this month of April, Conner will start producing 3.5-inch HDDs in Irvine, Scotland, in a 40.000 square foot plant in a first phase, and that should employ about 250 people before the end of the year. The first product to be offered will be a 40MB drive and first shipments are scheduled for June. Conner will receive substantial finances from the Scottish Development Agency.

This article is an abstract of news published on the former paper version of Computer Data Storage Newsletter on issue ≠27, published on April 1990.

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