STORAGE TECHNOLOGY Maxtor Faces Rough Road As Top Disk Maker.(A)

By Brian Deagon

Investor's Business Daily

Maxtor Corp. officially becomes the world's largest supplier of computer disk drives on Monday. It's an impressive feat, since the company was near death four years ago.

Maxtor has just completed its $1.4 billion acquisition of Quantum Corp., theNo. 2 disk drive maker behind Seagate Technology Inc. Before the deal, Maxtor ranked No. 3.

The merger cuts the number of disk drive manufacturers to eight from almost 80. Indeed, so cutthroat is the $30 billion industry that one writer used it asthe basis for a book on how esteemed, aggressive and innovative companies suddenly find themselves in the dustbin.

"Nowhere in the history of business has there been an industry like disk drives, where changes in technology, market structure, global scope and vertical integration have been so rapid, pervasive and unrelenting," wrote Clayborn Christensen in his book "The Innovator's Dilemma."

Maxtor still exists thanks to operating capital from South Korea's Hyundai Electronics. Hyundai took over the ailing company in 1994 by acquiring the 63% of Maxtor it didn't already own for $200 million.