ArmStrong / Broadway

HDD Sector: Sector continues to thrive, with more good news coming in, which bodes well for our HDD players. Accorcding to channel checks, market leader Seagate and WD expect the HDD industry to ship 155m-160m drives in the seasonally-weak June quarter, and guided revenue growth of 12% and 32-38% qoq, respectively. The current build plan translates to higher volumes in the September and December quarters for both Seagate and WD. Recall last mth, iSuppli released an industry report, citing that the HDD industry is set to register record revs in the qtrs ahead, thanks to higher ASP that compensated for the wreckage and loss shipments left by the Oct floods in Thailand last yr. Expect ASP to stay at elevated levels throughout 2012 and 2013. Overall, we note that key beneficiaries in the HDD sector includes ArmStrong and Broadway.