Hutchinson Technology Incorporated researches, designs, develops, manufactures, and supplies suspension assemblies for hard disk drives in Thailand, Hong Kong, the Philippines, Malaysia, the United States, and internationally. The company manufactures its suspension assemblies with proprietary technology and processes with very low part-to-part variation. These processes require manufacturing to precise specifications that are critical to maintaining the necessary microscopic clearance between the head and disk and the electrical connectivity between the head and the drive circuitry. The company designs its suspension assemblies with a focus on the increasing performance requirements of new disk drives, principally more complex, increased data density, improved head-to-disk stability during a physical shock event and reduced data access time. During 2014, the company shipped 432 million suspension assemblies of all types, supplying all manufacturers of disk drives and head-gimbal assemblers. Products The company categorizes its products as either suspension assemblies or other, which consists primarily of precision component manufacturing, tool design, tool build and metrology, suspension assembly components, disk drive industry-related engineering services, and specific disk drive program capacity and biomeasurement products. The company was selected to provide an optical image stabilization (OIS) actuator for a smartphone camera. The company’s OIS actuator is based on shape memory alloy (SMA) technology and improves picture and video quality, particularly in low-light conditions, and offers performance and size. The company is bringing this product to market with its partner, Cambridge Mechatronics Ltd., a high technology design and engineering company based in Cambridge, England. In addition to marketing, design and development, the partnership includes sharing in required investments and potential profits. The company’s SMA OIS product would be used in a smartphone for the Chinese market. The company is also working with other interested smartphone and camera module makers who are evaluating its SMA OIS actuator for potential inclusion in their future products. Research and Development The company’s research and development efforts are directed at continuing to develop suspension assembly capabilities and features that enable its products to meet performance criteria desired by its customers for specific drive applications. The company’s research and development expenses were $17,316,000 in 2014. Customers The company’s disk drive products are sold principally operating primarily from its headquarters in Hutchinson, Minnesota. The company sells its suspension assemblies to original equipment manufacturers for use in their products and to a subassembler who sells to original equipment manufacturers. Its customers include Western Digital Corporation; Seagate Technology, LLC; SAE Magnetics, Ltd./TDK Corporation; and Hitachi Global Storage Technologies (a Western Digital company). Seasonality Historically, the disk drive industry has experienced seasonal demand, with higher levels of demand in the second half of the calendar year driven by consumer spending. Seasonal demand for the company’s suspension assemblies generally tracks that of the disk drive industry and also might be delayed or accelerated by existing inventory levels in the supply chain. Intellectual Property As of September 28, 2014, the company held 208 United States patents and 20 foreign patents, and the company had 22 patent applications pending in the United States and 19 patent applications pending in other countries. Competition The company’s principal competitors are Nihon Hatsujo Kabusikigaisha (NHK); Magnecomp Precision Technology Public Company Limited (MPT), a subsidiary of TDK Corporation; and NAT Peripheral (H.K.) Co., Ltd., (a joint venture of NHK and TDK Corporation). History Hutchinson Technology Incorporated was founded in 1965. The company was incorporated in Minnesota in 1965.
hutchinson tech (HTCH:NASDAQ GS)
40 West Highland Park Drive NE
Hutchinson, MN 55350
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