The Cutting Edge: Computing / Technology / Innovation : Which Disk Will Slip? : Firms Face Off Over Computer Data Storage

TIMES STAFF WRITER

In the Irvine Spectrum Business Park, Pinnacle Micro Inc.'s two-story building looks up to Western Digital Corp.'s 14-story headquarters much the way David must have looked up at mighty Goliath.

Barely a stone's throw apart in Irvine, these computer data storage companies have lived in peaceful coexistence for years, because a technological wall separated their industries. But with the advent of multimedia technology--enabling computers to combine sound, text, graphics and video--the neighbors may soon become adversaries.

Pinnacle, a maker of optical storage devices, senses an opportunity and is readying its slingshot. Western Digital, a leading maker of magnetic disk drives with $1.2 billion in annual sales, insists it isn't worried it will suffer Goliath's fate.

Each company's products perform the same basic function: storing computer data. Whichever can do that better at the best price will have a future; the other may be left spinning in the dustbin of history.

"Our belief is that optical disks will be around 30 years from now and magnetic won't exist," said Scott Blum, who co-founded Pinnacle Micro Inc. with his father, Bill, in 1987 and now serves as executive vice president. "This is what we've worked on for seven years."

Companies such as Western Digital beg to differ. At stake is a share of the multibillion-dollar personal computer data storage industry, where demand is expected to explode in the future as companies vie to electronically supply entertainment and information to businesses and homes.

Not every computer user cares who survives this battle, but it matters to tens of thousands of workers--from engineers to assemblers--who make their living in the PC storage industry, which so far has remained largely American-owned despite efforts by foreigners to grab a foothold.

Until now, magnetic has been king. The $700-million optical disk drive industry is puny next to the $8.3 billion spent on magnetic hard drives each year, based on estimates by market researchers Disk/Trend Inc. in Mountain View, Calif., and Freeman Associates Inc. in Santa Barbara. The magnetic disk drive industry mushrooms to $23.6 billion when sales of stand-alone drives are included.

It will be difficult to mount a serious challenge to the magnetic disk drive manufacturers, which grew on the enormous success of the personal computer. The disk drive serves as the permanent memory system for the PC. But Pinnacle's executives believe business and home users will eventually favor their type of storage system, which is expected to undergo a major enhancement next year.

Pinnacle is set to release its enhancement project, code-named Diablo, next spring. For the first time, he said, an optical disk drive will cost less than similar high-capacity magnetic disk drives.

The magnetic hard drive makers scoff.

"The epitaph of the disk drive industry was written in the mid-1980s when optical first appeared," said Peter Knight, vice president of business development at Conner Peripherals Inc. in San Jose, a top disk drive maker. "Many theorists stood up and talked about how the fundamental limit of the disk drive was coming. I thought optical would be a serious challenger. As time goes on, it's clear that isn't the case."

"We don't have tunnel vision," said Gary Marks, vice president of marketing at Western Digital. "There will be peaceful coexistence between hard disks and optical for a long time."

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Marks' view is shared by industry experts such as Bob Katzive, a vice president at Disk/Trend, and Phil Devin, storage analyst for Dataquest Inc., a market researcher in San Jose.

"We don't see optical drives as a replacement for the magnetic hard disk," Katzive said. "They're good for storing things as archives. But if you need to (change) it fast, the hard disk drive is better."

Optical drives use a laser to read bumps and grooves on a metal platter, much like a compact disc player. In magnetic disks, a mechanical head reads the magnetic pattern on the metal disk. In both, the disks spin past a head, which reads the data or changes it based on commands from the computer's main processor.

This ability to alter, or "write" on, the disk quickly is key to a disk drive system, but for optical drives, it is still too slow and expensive--which puts their manufacturers at a disadvantage.

But Bill Blum, 59, stresses that "rewriteable" optical technology--which allows data to be repeatedly recorded and erased--has been on the market for only four years, compared to more than a decade for magnetic.

"We can put more information per square inch than them, and we just started," Scott Blum said. "They're pushing the limits. We're just beginning to make advances."

It is next to impossible to forecast the best technology for the future based on those that prevail today, said Bob Abraham, vice president of Freeman Associates.

"No one really knows where the physical limits are," Abraham said.

Technological advance is a game of numbers. If Pinnacle improves its optical technology faster than competing magnetic disk drive companies, it will gain ground in sales. Speed, capacity and price matter most. Analysts, however, say that optical technology is behind on every front.

Pinnacle had about $39 million in sales last year. With barely 100 employees, it competes against Japanese rivals such as Sony, Panasonic and Olympus. Its principal customers are businesses that have huge archives, especially defense companies.

The next step for Pinnacle is to overcome the challenges optical drive makers face, which include developing better lasers that can read data squeezed into ever tighter spaces on a disk. It must build its drives in smaller packages to match the size standard of magnetic disk drives. It must also improve its write speeds, or the time it takes to record data, several times over to catch up with magnetic drives.

Much of this advancement depends on how quickly new laser heads are developed, and Pinnacle is dependent on the Japanese companies that manufacture them.

Considering the obstacles, some optical players have simply decided not to directly challenge their magnetic hard disk rivals.

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Western Digital, for instance, has doubled the capacity of its hard disk drives every 16 months. Marc Nussbaum, vice president of engineering for Western Digital, says there is no foreseeable "brick wall" to such advances. In fact, a new technology expected to be on the market in 1995--magnetic resistive heads--will virtually quadruple capacity on magnetic disk drives.

And last year Western Digital established a new standard for magnetic hard disk drives--dubbed the enhanced intelligent drive interface--to accommodate ever higher storage levels.

While typical drives today store a maximum of 528 megabytes--about 264,000 typewritten pages--future drives could hold 10 times as much, thanks in part to the new technology standard, Nussbaum said.

The unanswered question is when will magnetic drive makers max out their ability to stretch capacity.

"Sooner or later there will be a limit for magnetic," said Peter Rentzepis, a chemistry professor at UC Irvine who is working on an $18-million project to develop an optical drive of the future. "The only way to overcome it is with optical. How soon? I cannot say."

HOW OPTICAL DRIVE WORKS

These drives incorporate a laser and are used for storing large volumes of data. The laser's narrow beam can write more data in less space than the magnetic drive.

Writing data 1. Laser heats a spot; alloy layer crystallizes into loose particles. 2. Write head passes over the revolving disk, creating a magnetic field that aligns the crystal particles according to positive or negative polarities, representing the binary language of computers, which is based on a system of zeros and ones.

Reading data 1. A second, weaker laser reflects off of aluminum surface. As beam passes through alloy, crystallized particles polarize the light. 2. Sensor receives polarized light and reads its binary code.

HOW MAGNETIC DRIVE WORKS

Magnetic drives are standard in desktops, but are also used in supercomputers.

Writing data 1. Read/write head passes over revolving disk. 2. While passing under read/write head, particles are organized into magnetic bands according to their positive and negative polarities.

Reading data 1. Iron particles create a magnetic field, generating a current through the coil. 2. Computer "reads" direction of current and interprets its binary code.

Sources: "How Computers Work" by Ron White, Times reports; Researched by JANICE L. JONES / Los Angeles Times

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