Seagate 2014 Annual Report Download - page 11

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TableofContents
Manufacturing
Wedesignandproduceourownread/writeheadsandrecordingmedia,whicharecriticaltechnologiesfordiskdrives.Thisintegratedapproachenablesusto
lowercostsandtoimprovethefunctionalityofcomponentssothattheyworktogetherefficiently.
Webelievethatbecauseofourverticaldesignandmanufacturingstrategy,wearewellsuitedtotakeadvantageoftheopportunitiestoleveragetheclose
interdependenceofcomponentsfordiskdrives.Ourmanufacturingefficiencyandflexibilityarecriticalelementsofourintegratedbusinessstrategy.We
continuouslyseektoimproveourmanufacturingefficiencyandreducemanufacturingcostby:
•employingmanufacturingautomation;
•improvingproductqualityandreliability;
•integratingoursupplychainwithsuppliersandcustomerstoenhanceourdemandvisibilityandreduceourworkingcapitalrequirements;
•coordinatingbetweenourmanufacturinggroupandourresearchanddevelopmentorganizationtorapidlyachievevolumemanufacturing;and
•operatingourfacilitiesatoptimalcapabilities.
Averticallyintegratedmodel,however,tendstohavelessflexibilitywhendemandmoderatesasitexposesustohigherunitcostsascapacityutilizationisnot
optimized.
ComponentsandRawMaterials
Diskdrivesincorporatecertaincomponents,includingaheaddiskassemblyandaprintedcircuitboardmountedtotheheaddiskassembly,whicharesealed
insidearigidbaseandtopcovercontainingtherecordingcomponentsinacontaminationcontrolledenvironment.Wemaintainahighlyintegratedapproachtoour
businessbydesigningandmanufacturingasignificantportionofthecomponentsweviewascriticaltoourproducts,suchasrecordingheadsandmedia.
Read/WriteHeads.Thefunctionoftheread/writeheadistoscanacrossthedisk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,thoughchallengesinmagneticfilmpropertiesandtopographical
structuresareuniquetothediskdriveindustry.Weperformallprimarystagesofdesignandmanufactureofread/writeheadsatourfacilities.Weusea
combinationofinternallymanufacturedandexternallysourcedread/writeheads,themixofwhichvariesbasedonproductmix,technologyandourinternal
capacitylevels.
Media.Informationiswrittentothemedia,ordisk,asitrotatesatveryhighspeedspasttheread/writehead.Themediaismadefromnon-magnetic
material,usuallyaluminumalloyorglass,andiscoatedwiththinlayersofmagneticmaterials.Weuseacombinationofinternallymanufacturedandexternally
sourcedfinishedmediaandaluminumsubstrates,themixofwhichvariesbasedonproductmix,technologyandourinternalcapacitylevels.Wepurchaseallofour
glasssubstratesfromthirdparties,whichweuseinthediskdriveswemakeformobileproducts.
PrintedCircuitBoardAssemblies.Theprintedcircuitboardassemblies(PCBAs)arecomprisedofstandardandcustomASICsandancillaryelectronic
controlchips.TheASICscontrolthemovementofdatatoandfromtheread/writeheadsandthroughtheinternalcontrollerandinterface,whichcommunicates
withthehostcomputer.TheASICsandcontrolchipsformelectroniccircuitrythatdeliversinstructionstoaheadpositioningmechanismcalledanactuatortoguide
theheadstotheselectedtrackofadiskwherethedataisrecordedorretrieved.Diskdrivemanufacturersuseoneormoreindustrystandard
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