History (1991): Thin-Film Head Joint Venture Between Read-Rite and Sumimoto

Read-Rite SMI is a new company in which Read-Rite Corp. (Milpitas, CA) will have a small majority with its partner Sumimoto Metal Industries Ltd. (Osaka, Japan).

The company’s target is to manufacture in Japan and sell throughout the world thin-film heads for HDDs.

Read-Rite is a leading independent supplier of thin-film heads with about 42% of the merchant market share, without including Seagate, the world’s largest thin-film head manufacturer but mostly for its own needs.

By 1993, the market for disk heads has been forecast to 158 million units, nearly half of which will be thin-film.

Despite a good position and large customers like Conner and Maxtor, Read-Rite encountered a cash shortage problem.

In this venture, Sumimoto has given the money to its partner that can now enter the Asian market.

In exchange, Sumimoto acquires a little more than a 10% share in Read-Rite’s capital. The Japanese company plans to invest $72 million with the opening in 2H92 of a 50,000 square-foot plant near Osaka and a planned production of one million heads per month.

It already had a small thin-film head production in Japan, mostly for NEC and its HDDs for mainframe computers.

This article is an abstract of news published on the former paper version of Computer Data Storage Newsletter on issue ≠43, published on August 1991.