Western Digital Scores While Others Stumble

By Julian Matthews

The recent upheavals in the hard disk drive (HDD) manufacturing industry appear to have left US drive maker Western Digital Corp unscathed.

According to International Data Corp, Western Digital Corp is set to gain 18% market share in 1996 from 14% a year ago and is ranked third behind leaders Seagate Technology Inc and Quantum Corp.

At the opening of its second facility in Malaysia in October, chairman, president and CEO of Western Digital Corp, Charles Haggerty said in its 1996 fiscal year the company made about 15.3 million HDDs up from 10 million the previous year, raking in revenues of almost US$3 billion. The company is targeting to make 21 million HDDs in fiscal 1997.

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Global Slowdown Strikes Malaysian Electronic Factories

By Julian Matthews

The global downturn in the electronics industry is beginning to be felt in Malaysia following the closure of factories and a slowdown in production of existing plants.

Many factories, mainly in Penang, have put a freeze on recruitment and are controlling overtime, reducing shifts and shutting down during weekends, claimed OK Lee, chairman of the northern branch of the Federation of Malaysian Manufacturers.

“Business will be slow for the next six months, possibly until early next year,” Lee said.

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Negroponte: Why Bits Matter

By Julian Matthews

Nicholas NegroponteWhen Massachusetts Institute of Technology Media Laboratory founder and digital economy advocate Nicholas Negroponte makes a prediction about the future you can’t help but sit up and listen. But his vision - however close to the truth it may appear - can be frightening. At a talk in Kuala Lumpur earlier this year, his candid responses seemed threatening even.

Taking questions from the floor, Negroponte tells a Xerox employee to “exercise his options soonest”. A newspaper owner asking about the future of his industry, is told, wryly: “The unfortunate thing about newspapers is the word paper.” Middle management is belittled as relics of the past; in fact middle anything, says Negroponte will vanish without a trace. Asked how governments should respond to the coming digital economy, Negroponte says their only logical response is to step aside.

Nicholas Negroponte’s audacity stems from the fact he has more often been right than wrong.

When he first spoke of the convergence of computing, communications and entertainment 20 years ago, he was considered a borderline nut-case. A proposal he submitted to government in 1975 on “multimedia computing” was accepted on the condition that the first word be dropped because it sounded frivolous. Today, corporations are betting billions on the multimedia age.

The 12-year-old MIT Media Lab is proof of this. It is sponsored by 160 corporations the world over, including the likes of IBM, Sony and Warner Brothers. Negroponte is the guiding force behind the 30 faculty staff and 300 student-employees of this respected hotbed for interdisciplinary research on media innovation. He is also the lab’s No. 1 salesman, jetting the world to raise funds and speaking at high-level conferences.

Yet for all its high-tech promise, none of the Media Lab’s research appears to have any short-term commercial value. Sponsors also cannot specifically cite how their support has paid off. The research projects themselves are intentionally far out. Sample this: a system that reads massive amounts of news at night and delivers a personalised newspaper for you in the morning that caters to your tastes and interests for the day. Or how about a smart refrigerator that monitors its contents and orders directly when its running out of say, milk. Or perhaps a telephone that screens your calls and decides whether or not to interrupt when you are in the midst of dinner or a domestic crisis.

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Malaysia to Open Up to Knowledge Workers

By Julian Matthews

Malaysia will allow the unrestricted import of knowledge workers for the next ten years and complete foreign ownership of companies that locate operations within the country’s proposed Multimedia Super Corridor (MSC).

“Knowledge workers can come and go freely. Ownership of companies in the MSC will not be subject to local participation unless they want to,” said Prime Minister Mahathir Mohamad.

He said the incentives were among several commitments to be incorporated into a “Multimedia Bill of Guarantees” specifically tailored for the success of enterprises investing in the MSC. The bill is expected to be tabled in Parliament by the end of the year.

Dr Mahathir was speaking at the Multimedia Asia ‘96 conference in Kuala Lumpur during which he outlined a blueprint for the ambitious MSC project. The MSC is a 15km by 50 km area stretching between the capital city of Kuala Lumpur and the new international airport currently under construction at Sepang in the south.

(More: Business & Market feature section)

Published in Nikkei Electronics Asia, Oct 01, 1996

by Julian Matthews, Malaysian correspondent

Govt Reverses Telecom Merger Directive

by Julian Matthews

The Malaysian government has decided to abandon its plans to force telecommunication service operators in the country to merge. Instead, the go-ahead has been given for all operators that have licences for telecommunication services to proceed with their infrastructure build-up and let market forces decide their fates.

In January 1996, the government announced that the telecommunications industry would be rationalized, given the sudden rise of new players in the industry. Since 1991, when the government privatized national carrier Telekom Malaysia Berhad and liberalized the telecommunication industry, licenses had been issued on an ad hoc basis, mainly to politically-connected groups.

Left out in the cold under the government’s January plan were three companies. One, Time Telecommunications Sdn Bhd, had already completed 80% of its US$600 million optical fiber network and signed on 6,000 corporate subscribers.

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Local Firm Touts Modular UPS System

By Julian Matthews

Local Uninterruptible Power Supply (UPS) manufacturer P K Electronics Industries Bhd has invented an online UPS unit which it claims is the first truly modular system of its kind in the world.

The US9000 comes in single-size 1kVA power modules weighing about 18kg each that can be stacked in cabinets. The cabinets come in many different sizes and can be expanded to a few hundred slots. Each module has a built-in battery with standard backup time. In situations where backup time needs to be extended, additional similar-sized battery modules can be plugged into the cabinet slots.

Loh said ease of installation and maintenance made the product superior to existing products on the markets. Current UPS systems in large computer and industrial applications are heavy, bulky and take up a lot of space. They are also difficult to install and move around. The US9000 modules are easily transportable and assembled.

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Sony consolidates, increases local content

By Julian Matthews

In March 1996, Sony Corp announced that it planned to source components from Malaysian companies for its 73 factories worldwide. Sony Corp chief executive officer Norio Ohga said Sony is looking towards sourcing locally instead of depending on Japan for its materials.

Addressing a Sony sponsored procurement forum in Malaysia recently, Ohga says his company recognized the significant growth of the Malaysian component industry in recent years and would make it a top priority to promote procurement of local parts.

The shift in policy to source locally is also expected help tip the trade balance scales in favor of the host country, says Ohga, adding that Sony is expected to lend its expertise to establish the component suppliers and ensure the company’s high production standards are met. Read more

The world according to Negroponte

By ANITA MATTHEWS

MIT professor Nicholas Negroponte insists he is, by nature, an optimistic person.

Jetlagged, he looked more tired than wired while presenting his paper at a recent conference organised by the Malaysian Institute of Management.

After spending a day listening to his version on how the world is going to evolve, you’ll want to believe in it happening too.

He reflects hope and underneath his suave and cool persona, Negroponte does very little to reveal the other side. If he was upset (which he was during the press interview), he hid it well and replied in loaded sentences.

Ask a pessimistic question and his retort is “why are we constantly looking at some intrinsic badness, why not otherwise.”

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Quantum Closes Factories in US, Malaysia

Hard disk drive maker Quantum Corp is closing two plants in Malaysia and California and laying off 1,800 regular and 450 temporary employees.

Quantum expects to report a charge of US$160 million to US$190 million from the moves in the company’s fourth fiscal quarter ending March 31, 1996. The charge, two-thirds of which is non-cash, also includes the write-off of capital equipment and inventory and severance for employees affected by the closure of two plants.

In explaining the closure, Quantum regional marketing director David Rawcliffe said making the new generation of HDDs required a high level of factory automation which Matsushita-Kotobuki was best qualified to handle. Read more

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