Jul 24, 1995

Seagate Announces Multi-Million Dollar Wafer Fabrication Plant

BLOOMINGTON, Minn. - Seagate Technology, Inc. (NYSE: SEG) today announced that it will begin construction this fall of a third, multi-million dollar world-class wafer fabrication plant in Bloomington. The plant, which will adjoin current operations in Bloomington, is scheduled to begin production in January 1997 and will employ approximately 500 people.

Featuring some of the industry's most advanced, state-of-the-art technologies for the manufacture of magnetic recording heads, the new 225,000 square-foot facility will produce the latest generation of inductive thin-film and magnetoresistive (MR) heads. Current generation MR head technology enables information to be packed on disc platters in densities above 1,000 Mbits per square inch, three to four times greater than conventional thin-film heads. Future MR heads are expected to enable densities of up to 10,000 Mbits per square inch.

"Our goal is to maintain our position as the largest manufacturer of magnetic recording heads in the world and to generate annual revenues of $1 billion from the OEM sale of components by the end of the decade," said Dr. Brendan Hegarty, executive vice president and chief operating officer for Seagate's Components Group. "Combined with our facility in Northern Ireland and our existing operations in Bloomington, this new plant will boost our worldwide production capability to more than 7.5 million recording heads per week and help us meet the rising global demand for disc drives."

Using a tri-fab construction process to maximize the contaminant-free clean space required for the manufacture of such precise instruments, the plant will employ both leading-edge equipment and advanced process technologies, including molecular ion milling, electroplating, photolithography, vacuum deposition and reactive chemical etching.

"In this business, precision is critical," said Hegarty. "Because Seagate manufactures many of its core disc drive components, our engineers are able to work together, striving to achieve the most exacting tolerances and maximum technological yield from component interaction. This vertical integration helps us to not only increase the capacity, speed and quality of our drives, but also to realize substantial cost efficiencies."

"Since Seagate entered the thin-film recording head business, we have improved our cost/performance ratio by nearly 2,000 times," continued Hegarty. "We have reduced the cost of heads by a factor of 25, while increasing areal densities 75 times."

Seagate currently operates two wafer fabrication plants--the recently expanded Springtown plant in Londonderry, Northern Ireland, and its Recording Head Operations (RHO) in Bloomington, the largest recording head wafer fabrication facility in the world. The new Bloomington plant will join this pair in producing advanced 200mm format wafers from which magnetic recording heads are cut.

"When deciding where to build a new plant, global competition forces us to consider a number of factors," said Seagate president and CEO, Alan Shugart. "This time, Minnesota rose to the top of the list. The efforts of the state and local government, and the strength and quality of the workforce, continue to make Minnesota an excellent home for high technology business."

Seagate is pursuing a vigorous worldwide expansion strategy targeted at building manufacturing capacity to support a disc drive market demand that, according to independent market research firm International Data Corporation, is expected to grow to more than 116 million units per year by 1996, and exceed 193 million units annually by the end of the decade. Seagate is also continuing its commitment to the vertical integration of its manufacturing operations, maintaining over two million square-feet of component manufacturing space in seven countries, including recently announced expansions of its recording media and media substrate production facilities in Fremont and Anaheim, California.