October 27, 2004 To: IDEMA Membership From: IDEMA IDEMA IDEMA IDEMA USA Board of Directors Executive Advisory Council Asia-Pacific Board of Directors Japan Board of Directors Dear Member: Storage demand is growing in every corner of the world. Millions of families in India and China are buying their first computers. PC builders in Eastern Europe and Asia are establishing their brands and growing market share. Enterprises are building new data centers in each country of operation. Consumers are listening to music on MP-3 players; families are watching TV on digital video recorders; and digital photographers are consuming gigabytes of drive space. After years of struggling with stagnant growth, eroding revenues and unattainable profits, the HDD industry will see double-digit expansion in 2004 and even more demand in 2005 thanks to new applications and the global growth of the internet and IT infrastructure. As a global industry we are facing global challenges. But your trade group IDEMA is not global. It is segmented into three separate domestic organizations each focused on a local market. This makes IDEMA inefficient at promoting new storage applications, ineffective at encouraging HDD adoption in growth markets, and unproductive addressing worldwide commercial challenges. Most importantly, speaking as a unified voice for our industry is impossible under our current structure. Consequently, IDEMA needs to align itself with global realities. It needs to organize into one, seamless worldwide trade organization that can efficiently promote its members’ interests, promote new HDD and ODD storage applications and continue to provide a world forum for technical standard adoptions. So, we need our member companies to support merging the three IDEMA organizations into a single trade organization. Our ballots for a “single” IDEMA organization and Board of Directors will be sent to your company in the coming weeks. We want your support to unify IDEMA’s disparate corporate makeup, simplify our dues structure, organize global discounts, and streamline our operations. Our commitment is to create a more efficient IDEMA that is more effective in addressing the challenges of our global industry. Here are some of the key advantages of a unified IDEMA: Formation of a Global IDEMA Structure: IDEMA has been operating as three distinct organizations: USA, Japan, and Asia-Pacific. These groups, while using the same name, use redundant operations, have different objectives and do not reflect the global structure of the disk drive industry. The ballots you will receive propose to unify IDEMA under a single global Board of Directors with regional operating boards and a single mission. A unified IDEMA will have synchronization strategies, set common goals, align programs and report to its members from a global as well as regional perspective. Advance Commercial Standards: Our industry is not just about technology advancement. It is about commercial advancement too. Often our commercial issues are more critical to our industry’s health. As an example, IDEMA has entered into collaboration with the Anti-Gray Market Alliance (AGMA) to examine standards to give our HDD companies better visibility and control of the distribution channel. Commercial issues are international in scope. Addressing the “Gray Market” in the US without Europe will fail. Promoting inventory practices in Asia without also addressing them in Page 1 of 3 the US is ineffective. Only a global IDEMA can tackle the complexities of international commercial standards. Invest in Communications: A new, global IDEMA web site has been introduced which will be a “must visit” site for our hundreds of member companies worldwide. Look for additional services such as IDEMA Daily Industry News, a suite of new White Papers and Position Statements that will provide leadership and best-in-class services for our important industry. Technical Standards to Advance HDD integration in Consumer Electronics: We are working globally to encourage wider adoption of HDDs through standards focused on new applications including consumer electronics. IDEMA is also working aggressively to standardize ESD benchmarks, new disk sizes, and other critical technology points. Of course, our excellent Technical Standards Program will continue to grow and focus on member company issues. Produce compelling events including DISKCON USA, DISKCON Asia-Pacific, and Information Storage Week Japan: A global IDEMA will more effectively promote our events to provide industry participants networking and educational opportunities. Our shows and conferences are the cornerstones of our programs, as are our symposia, education, and networking events. IDEMA will host its first Financial Conference on November 4 th, 2004 in Santa Clara focusing on improving the financial community’s visibility and understanding of the disk drive industry. Changing dues structure: It takes money to operate a trade association, and we are grateful to our members for their support. IDEMA will institute a simpler global member fee structure. A member company will pay a single fee, giving its employees worldwide access and benefits. Some members will see their dues increase to support the new programs and deliverables. It is never easy to ask for higher fees, but we plan to make IDEMA much more valuable to you and your industry colleagues. Starting in November 2004, IDEMA will send two ballots by email to your company’s corporate contact for approval. The first will be to approve our global structure and to make adjustments to IDEMA’s policies. The second will seek your vote and support for IDEMA’s first Global Board of Directors. Your prompt reply to both ballots will speed our progress toward the launch of the “new” IDEMA in January 2005 Members of IDEMA’s US Board of Directors, Japan Board of Directors, Executive Advisory Council, and Asia-Pacific Board of Directors kindly request your support of these initiatives, as they seek to provide greater benefits to you and your company. Sincerely, Mark Geenen President, IDEMA The Board of Directors of IDEMA USA Saburo Adachi, Executive Vice President, Fujitsu Computer Products of America Dr. Alan Armstrong, Vice President, Marvell Mike Cordano, Executive Vice President, Maxtor Jeff Donnelly, Vice President, General Manager, KLA-Tencor Mark Geenen, President, IDEMA Dr. Ed Grochowski Bob Holleran, Senior Vice President, General Manager, Hitachi GST Rick Penn, Vice President, Operations, Hutchinson Technology Dr. Mike Russak, President and CTO, Komag Richard Rutledge, Vice President, Western Digital Dave Wickersham, Executive Vice President, Seagate Technology Adam Wray, Executive Vice President, Xyratex Advisor: Oz Fundingsland Executive Advisory Council Ed Braun, Chairman, President, CEO, Veeco Instruments Wayne Fortun, President and CEO, Hutchinson Technology Page 2 of 3 Ichiro Komura, Group President, Fujitsu, Ltd. Matt Massengill, Chairman & CEO, Western Digital Dr. Jun Naruse, President, Hitachi GST Paul Tufano, President & CEO, Maxtor Bill Watkins, President & COO, Seagate Technology The Board of Directors of IDEMA Asia Pacific John Coyne, Chair, Sr. Vice President and Managing Director, Western Digital (M) James M. Chirico, Sr. Vice President, Seagate Technology International TEH Bong Lim, Vice Chair, Managing Director, MMI Holdings Ltd. Masamitsu Horike, Managing Director, Hitachi Global Storage Technologies, Thailand Adam Giandomenico, President, Lighthouse Solutions Raymond Leung, President, SAE Magnetics TAM Man Chi, President, Kaifa Chackchai Panichapat, Chairman, Executive Board, Amata City Co. Ltd. (Thailand) Gary Davis, Executive Director, IDEMA Asia Pacific and Davis Consultants Asia Sdn. Bhd., CHAN Leng Wai, Executive Director, IDEMA Asia Pacific and PeopleNet Associates The Board of Directors of IDEMA Japan Hideki Harada, President, High Tech Association Ryuji Higuchi. Sr. Engineer, Hitachi Electronics Engineering Yuichi Hyakusoku, President, Mediken, Inc. Akira Kakehi, Co-Chair, Director, Fujitsu Ltd. Shun Kaneko, Executive Director, IDEMA Japan Seiji Kawagoe, Sr. Manager, Toshiba Corporation Kazuo Kobayashi, Director, Fujitsu Laboratories Ltd Noboru Kubokawa, Co-Chair, Chief Analyst, Institute of Information Technology, Ltd. Mikio Matsuzaki, Director, TDK Corporation Norio Ota, Executive Officer, Hitachi Maxell, Ltd. Takayoshi Otsu, Engineering Manager, Hitachi GST Japan Ryosuke Shimizu, Project Leader/Manager, Matsushita Electric Industries Co., Ltd. Shun-ichi Murakami, Specialist, ANELVA Corporation Tsuneo Suganuma, Chair, Sr. Chief Scientist, Hitachi, Ltd. Isao Suzuki, General Manager, Hoya Corporation Takutoshi Fujiwara, President, Fujiwara-Rothchild Ltd. Akira Terada, Executive Director, Alps Electric Co., Ltd. Toshihisa Ueno, Kobe Steel Hideaki Yamazaki, General Manager, Marshall & Yamazaki Consultant Group Page 3 of 3