More info about the Nordic, courtesy of Dale Stempson (#3948). |
The following is a repost from
JTS corporation was formed through Jugi Tandon's acquisition of the
technical assets of Kolak Corporation in February 1994. At that time,
a low-cost, profile 3.5 inch product was under development along with
a 3-inch -diameter low -profile disk drive. These products were the basis
for the offerings of the new company. Mr Tandon is well known in
the computer storage industry for his vision and his ability to bring
advanced products to market with wide industry acceptance of new
ideas and products.
Investors in the new company included the Tandon family and Tom
Mitchell. Subsequent investments have been made by Burr, Eagan,
DeLeage and Company, Western Digital Corporation, Sofinnova Inc.,
Walden Group, Advanced Technology Ventures, Needham and
Company, TA Associates, Brentwood Associates, and others. As of
October 1995, a total of $41 million had been raised for this new
The addition of Tom Mitchell to the management team at JTS brought
immediate credibility to the venture. Mr Mitchell was a cofounder of
Seagate Technology and president and chief operations officer of
both Seagate and Conner Peripherals. His experience in high-volume,
low-cost disk drive production is unparalleled in the industry.
Currently, JTS employs 130 people in the United States, eight in
Southeast Asia, and 1,190 in Madras, India.
The endorsement of JTS product design by Western Digital Corporation (WD)
was enforced by WD's equity investment in the company as well as its
purchase of manufacturing and marketing rights to certain JTS products.
Under the terms of this agreement, WD obtained manufacturing and marketing
rights to JTS's 3-inch disk drive products. WD also became a minority
shareholder in JTS as part of the transaction for a total consideration of
$10 million. (The technology portion of the investment was approximately
$6 million, and equity stake was $4 million). Both parties have reciprocal
royalty free cross license agreements for future 3-inch drive developments.
Mr Tandon's associations in India are broad. The Tandon family has
been the largest exporter of high-technology products from India for
many years. India offers tremendous labor cost savings and serves
as a source of significant working capital credit facilities and capital
investment funds for plant and equipment. Extensive tax holidays are
also available in India. Mr Tandon's family already controls businesses
in India producing head stacks, spindle motors, and voice coil motors
for disk drives. One of these companies, Modular Computer, based
in Madras, is being acquired as a JTS subsidiary. The Madras factory
currently employs about 1,200 people with very attractive labor rates.
A substantial investment has been made in the newly completed Madras
manufacturing facility. Currently, the Madras facility is producing 1,000 dives
a day with plans in place to grow to 10,000 drives per day.
JTS signed a volume purchase agreement with Compaq Computer, and
it is believed that Compaq has also agreed to help fund the final development
of the 3-inch drive named the Nordic.
The JTS product breakfast is focused on a narrow product line of 3.0
and 3.5 - inch disk drives with enhanced IDE interfaces. As recording
efficiencies increase, each of these form factors will be brought to higher
and higher capacities. One of the key factors in the proprietary JTS technology
is the highly integrated electronics board, which resides inside the head
disk assembly (HDA). This board allows the company to eliminate the
additional space normally required for the printed circuit card on the
back of a disk drive and also reduces the cost of the board substantially.
The Nordic is the most unique disk drive product available today. Its size
is similar to that of a 3.5 - inch floppy diskette. Its dimensions are 10.5 x 90 x 120mm
for two-platter, four-head configuration with a 640MB capacity. The drives
spin at 4,103 rpm, and the average seek time is 16ms, falling 14ms in
future drives. The drives use low-cost double-MIG heads from NMB in
Japan and currently have an areal density of 300Mb per square inch.
Development plans include a rapid climb in areal density and drive capacity.
The 640MB Nordic began first production shipments in October 1995,
and an 840MB product is due to customers before the end of 1995.
A three-platter, 12.7mm-high drive is scheduled for production in May
1996, with two-platter, 1,080MB, 10.5mm Nordic due in June. JTS intends
to use D-MIG heads for all of these steps, going as far as
500Mb-per-square-inch areal density before switching to thin film
The 3.5-inch JTS drive family is named Palladium and also features
low-profile products. The Palladium dimensions are 12.7 x 101.6 x 156.2mm
. Currently in that package, JTS is shipping two-platter, 540MB and 850MB
drives, with a two-platter, 1,080MB product due to customers in January 1996.
The D-MIG technology is expected to take JTS to a two-platter, 1,260MB
level in July 1996. The Palladium is identical to the Nordic in most respects
except for its media and outside case dimensions. The electronics and
mechanics are the same.
Most questions about JTS center on the issue of the 3-inch disk drive.
This product was developed specifically to target the market so closely
held by the 2.5-inch disk drives in mobile computers. PC makers became
most excited when they realized that this product would fit their low-power
requirements and provide an 80 percent increase in recording area over
that of a 2.5-inch drive. The inexpensive design platform can then
provide a drive with a substantial decrease in cost per megabyte and
still fit in portables. The leading 2.5-inch producers such as IBM and Toshiba
all use advanced recording techniques to reach higher capacities. IBM
uses MR heads, a PRML read channel, and glass media. JTS uses 1900
oe media and MIG heads.
The recipe points toward a cost saving to OEM buyers of as much as
$100 on a notebook while providing excellent profit margins for JTS. While
JTS technology is clearly behind that of IBM and Toshiba, the JTS cost
structure could allow these products to meet the entry-needs of mobile
PC manufacturers and gain a significant share of that market.
The JTS Palladium drives are aimed at the desktop PC market and
face a tougher competitive battle. These drives are going for the
market already crowded with Quantum, Seagate, Conner, Western Digital,
and Maxtor, each fighting for market share. With many of these vendors
already leaving the 540MB capacity point because of low profitability,
JTS may find a good opportunity to sell low-cost, "end-of-life" products.
JTS estimates that it will sell and build 900,000 Nordic drives and 1.5 million
Palladium products in the next 12 months. Dataquest estimates that the
total 1996 market for hard drives in notebooks and laptops will be 15 million
units. If JTS predictions are true, the company would gain 6 percent
market share in its first year.
Start-ups in the disk drive industry have not found entry into the market easy.
Conner's quick rise was fueled by the simultaneous growth of the 3.5-inch
rigid disk drive market. Now, JTS has thrown its hat into the market previously
dominated by 2.5-inch products as it begins its increased growth curve.
Timing may be everything, and JTS could not have picked a better
time to come into the market.
Tom Mitchell's strengths in bringing up manufacturing powerhouses will be
tested as he blazes new territory once again. Tom was the first to enter
Singapore and Thailand and was one of the first to expand into Malaysia
for disk drive production. India will be another challenge.
End of article.