Computer Memories Signs Pact With Atasi for Hard-Disk Drives

Computer Memories of Chatsworth signed a tentative agreement with Atasi to make and sell two hard-disk drives similar to those manufactured by the San Jose-based firm, which is now operating under protection of the federal bankruptcy courts.

Under last week’s agreement, which must be approved by the court, Computer Memories will be allowed to make and sell products similar to Atasi’s 85-megabyte and 170-megabyte drives for personal computers. Computer Memories would not disclose the price, but said that the agreement calls for payments of cash and royalties.

Hard, or Winchester, disks are rigid disks on which a computer records information. The drive is the device that reads and writes data on the disk. Both of the drives that Computer Memories will make under the Atasi agreement use disks that are 5 inches in diameter.

The two disk drives can store more information than Computer Memories’ existing products, analysts said, and use Atasi’s so-called “voice coil closed loop technology,” which allows a computer to retrieve data faster and more accurately.

The agreement is the first move by Computer Memories’ new chairman, Finis F. Conner, to expand the company’s product line. Conner has said that increasing the number of products Computer Memories offers is crucial to his effort to replace the business the firm will lose when its contract to supply IBM with disks expires Dec. 31. IBM accounted for 81% of Computer Memories’ $50.5 million in first-quarter revenue.

Conner said that the drives will be made at Computer Memories’ plant in Singapore and probably will be ready for sale early next year.