maxtor

Maxtor Corporation (NYSE: MXO) was (as of December 2005) the world's third-largest manufacturer of computer hard disk drives, before its acquisition by Seagate in 2006.

Maxtor targeted both the server and desktop market, concentrating on disk capacity more than disk speed for desktops.

History

The Maxtor co-founders, James McCoy, Jack Swartz and Raymond Niedzwiecki, began the search for funding in 1981. The founders are all ex-employees of IBM and graduated from the San Jose State School of Engineering. In early 1982, B.J. Cassin and Chuck Hazel (Bay Partners) provided the initial $3 million in funding and the company officially began operations on July 1, 1982. The company shipped its first product in February of 1983 to Convergent Technology and immediately received an additional $5.5 million in its second round of funding. The company also began negotiations with the EDB (Economic Development Board) of Singapore for favorable terms before committing to Singapore as its offshore manufacturing location. The DBS (Development Bank of Singapore) agreed to provide financing to help grow the company in Singapore. In 1983, the company established a liaison and procurement office in Tokyo, Japan that was headed by Tatsuya Yamamoto. Maxtor's product architecture employed 8 disks; 15 surfaces recorded data and the final surface was where the servo track information was located. The company developed its own spindle motor which was located within the casting containing the disks. This was a major departure from the then popular spindle motor being mounted external to the disks. The first product was designed to provide 190 MB of storage, but delays in getting magnetic heads to the Maxtor design resulted in the company taking what was available and the first drives were shipped with a capacity of 140 MB. The company received an additional round of financing of approximately $37 million in 1984 before going public in 1985 with Goldman Sachs as the prime underwriter.

In 1990, they entered the mass market with their purchase of the assets (but not the liabilities) of bankrupt MiniScribe in Longmont, Colorado. The transition was a tough one, with the early products of this union (notably the 7120 3.5-inch 120 MB drive) having many quality and design problems. Later products managed to sell well despite the initial problems, and in 1996 they completely redesigned their drive lines, introducing the Texas Instruments DSP-based DiamondMax series.

After nine years of development, the original XT-series of drives had achieved a capacity of 1 GB. Maxtor sold the rights to the series to a company called Sequel in the mid-1990s, thus exiting the server SCSI drive market. Sequel was not a disk drive manufacturer; rather they specialized in refurbishing drives for the existing customer base. Teetering on the brink of bankruptcy in 1992, Maxtor's exit from the high capacity 5.25-inch SCSI market temporarily left a product void in the industry. Around this time, SCSI versions of the 7000 series drives were also discontinued and all engineering operations in San Jose were shut down in late 1993, leaving only the former MiniScribe design engineering staff. After turnover in the executive staff, Maxtor realized its mistake, and having moved its headquarters to nearby Milpitas, gradually began rebuilding its Silicon Valley engineering staff. In 2000, Maxtor purchased Quantum Corporation's hard drive business. This move made them larger than their rivals (notably Seagate Technology), and also returned them to the server-SCSI market.

In 2001, Maxtor developed the DiamondMax Plus 540X, the first hard disk to break the 137 GB (128 GiB) ATA limit.

Maxtor, in recent years, like many other hard drive makers, had been expanding into the external hard disk market, such as the Maxtor One-Touch II personal hard drive that is marketed as convenient external storage for the home user.

Maxtor had initially made efforts to step into the 2.5-inch hard disk market (notebook computer format), but in the beginning of 2005, new management made the surprising decision to discontinue development in this field. This was considered by many industry watchers to be a particularly peculiar move, since the market for such hard drives (mainly notebook computers and MP3 players) was already experiencing rapid growth, with no signs of slowing down in the foreseeable future.

In December 2005 Maxtor confirmed that it was to be acquired by its rival Seagate. The deal is worth US$1.9 billion.

External links

• Maxtor website
• Seagate Press Release announcing Maxtor Acquisition
• Review of the NCQ technology introduced by Maxtor
• User review of the Maxtor OneTouch External Hard Disk