"We now mainly produce motors for 3.5-inch HDDs" used in desktop computers, said Ryusuke Mizukami, senior managing director of the world's largest miniature ball bearing parts manufacturer.

"As our competitors started entering the 2.5-inch HDD motor market, we decided to follow," Mizukami told financial news wire AFX Asia in a telephone interview.

Competition in the HDD market is intensifying while demand is increasing, prompting companies to adopt new tactics to improve their market share.

Earlier this year, technology giant Hitachi Ltd. said it would set up a new HDD firm with IBM Corp. of the United States.

In May, TDK Corp. president Hajime Sawabe said the company would focus on HDD operations to improve its earnings in the current financial year to March 2004 amid strong demand for the product.

Mizukami of Minebea said motors for 2.5-inch hard-disk drives would start contributing to overall sales from next year but declined to provide a revenue target.

Minebea Co. Ltd. had sales of 33.4 billion yen (282 million dollars) from hard-drive motors in the year to March 2003, mostly from motors for 3.5-inch HDDs.

"As we are entering the (2.5 HDD) market this year, the product will start contributing to our revenue from next year," Mizukami explained.

The senior executive said motors for 2.5-inch HDDs would likely be produced at a factory in Thailand.

"It is the company's only mass production site. We cannot produce (the motors for 2.5-inch hard-disk drives) anywhere else apart from there," he said, adding that Minebea produced over 60 percent of its total output in Thailand.

After launching mass production of motors for 2.5-inch drives, the company targets increasing its market share in HDD spindle motors to 40 percent by the end of March 2006 from around 25 percent currently.

SPACE.WIRE