Hard Disk Drive Industry Capital Equipment Spending to Total $24 B Between 2005 and 2010
Capital Equipment Supplier Opportunities for Technology and Unit Volume Requirements

Coughlin Associates, a leading data storage analyst firm, announces the release of its 2006 Hard Disk Drive Capital Equipment Market & Technology Report.

Capital equipment spending for the hard disk drive industry increased 39% in 2005 from 2004 with a further increase of 29% expected in 2006 over 2005. The table below shows spending for capital equipment in 2005 and 2010 as well as the ratio of capital spending to expected HDD company revenue.

      Year         Equipment Spending           Equipment
                                          Spending/HDD Company
      2005              $2.2  B                    7.9 %
      2010              $5.7  B                   10.6 %
Total 2005-2010         $23.7 B                   10.1 % (average)

In 2005:

--  73% of total capital equipment spending for production process
    equipment, 19% for production test and 8% for metrology.
--  38 % of capital spending for head and wafer; 33% for media and
    substrate; and 29% on drive equipment.

Major factors driving hard disk drive equipment spending from 2006 through 2010 are:

--  Annual drive volumes increasing 100% between 2005 and 2010
--  Shortages in critical new technology components
--  Form factors ratio changes:  2.5-inch and smaller HDDs will dominate
    by 2010
--  HDD and component companies have more cash to invest in equipment due
    to higher drive demand and stable drive prices
--  New HDD applications require new manufacturing capital equipment and
    process changes
--  Transition to perpendicular recording making much older equipment
--  Lower flying heights increasing metrology requirements as well as
    tightening of head and disk specifications
--  By 2009 and 2010, to continue areal density increases the industry
    must introduce new technologies such as HAMR, discrete track media or
    patterned media

The report includes in-depth analysis of capital spending trends, technical and market drivers for capital spending, and a breakdown of equipment spending categories and products. The 2006 Hard Disk Drive Capital Equipment Market and Technology Report will be available starting July 7, 2006 with a single issue of this report for $1,995.00. People looking for additional information on this report, wishing to purchase a copy of the report or obtaining company-wide report access can go to the Coughlin Associates web site at http://www.tomcoughlin.com/techpapers.htm or call us at 408-871-8808.

Tom Coughlin
Coughlin Associates
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