Seagate 2003 Annual Report Download - page 7

Table of Contents
Manufacturing our rigid disc drives is a complex process that begins with the production of individual components and ends with a fully
assembled unit. We design, assemble and/or manufacture a number of the most important components found in our rigid disc drives, including
read/write heads, recording media, printed circuit boards, spindle motors and ASICs.
Read/Write Heads . The function of the read/write head is to scan across the disc as it spins, magnetically recording or reading
information. The tolerances of recording heads are extremely demanding and require state-of-the-art equipment and processes. Our read/write
heads are manufactured with thin-film and photolithographic processes similar to those used to produce semiconductor integrated circuits.
Beginning with six inch round ceramic wafers, we process more than 25,000 head elements at one time. Each of these head elements goes
through more than 300 steps, all in clean room environments. Our read/write heads require highly advanced processes with tolerances
approaching the thickness of a single atom. We perform all primary stages of design and manufacture of read/write heads at our facilities.
Although the percentage of our requirements for read/write heads that we produce internally varies periodically, we currently manufacture all
of our read/write heads.
Recording Media . The function of the recording media is to magnetically store information. The domains where each bit of magnetic
code is stored are extremely small and precisely placed. As a result, the manufacturing of recording media requires sophisticated thin-film
processes. Each disc is a sequentially processed set of layers that consist of structural, magnetic, protective and lubricating materials. Once
complete, the disc must have a high degree of physical uniformity to assure reliable and error-free storage. We purchase aluminum substrate
blanks for recording media production from third parties, mainly in Japan. These blanks are machined, plated and polished to produce finished
substrates at our plant in Northern Ireland. We also purchase glass substrates from third parties in Japan for use in our mobile and small form
factor consumer electronic products. Although the percentage of our requirements for recording media that we produce internally varies from
quarter to quarter, we currently manufacture almost all of our recording media requirements. We are in the process of expanding our media
production facility in Singapore to further increase our production capacity. Our strategy is to purchase no more than 20% of our recording
media requirements from third-party suppliers in any given quarter.
Printed Circuit Boards . We assemble and test a significant portion of the printed circuit boards used in our rigid disc drives. Printed
circuit boards are the boards that contain the electronic circuitry and ASICs that provide the electronic controls of the rigid disc drive and on
which the head-disc assembly is mounted. We assemble printed circuit boards at our facilities in Malaysia and China.
Spindle Motors . We participate in the design of most of our spindle motors and purchase them principally from outside vendors in
Asia, whom we have licensed to use our intellectual property and technology.
ASICs
. We participate in the design of many of the ASICs used in our rigid disc drives for motor and actuator control, such as interface
controllers, read/write channels and pre-amplifiers. We do not manufacture any ASICs but, rather, buy them from third-party suppliers.
Following the production of the individual components of the rigid disc drive, the first step in the manufacture of a rigid disc drive itself
is the assembly of the actuator arm, read/write heads, discs and spindle motor in a housing to form the head-disc assembly. The production of
the head-disc assembly involves largely automated processes. Printed circuit boards are then mated to the head-disc assembly and the
completed unit is tested prior to packaging and shipment. Final assembly and test operations of our rigid disc drives occur primarily at facilities
located in China and Singapore. We perform subassembly and component manufacturing operations at our facilities in China, Malaysia,
Northern Ireland, Singapore, Thailand, and in the United States, in California and Minnesota. In addition, third parties manufacture and
assemble components for us in various Asian countries, including China, Japan, Korea, Malaysia, the Philippines, Singapore, Taiwan and
Thailand, and in Europe and the United States.
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