Maxtor

Not to be confused with the video card manufacturerMatrox.

Maxtor Corporationwas an American computerhard disk drivemanufacturer. Founded in 1982, it was the third largesthard disk drivemanufacturer in the world before being purchased bySeagatein 2006.

Maxtor Corporation

Company type	Public
Traded as	NYSE:MXO
Industry	Technology
Founded	1982(1982)
Founder	James McCoy, Jack Swartz, and Raymond Niedzwiecki
Defunct	June 30, 2006(2006-06-30)(company)
Fate	Acquired bySeagate Technology
Headquarters	500 McCarthy Boulevard, Milpitas, California , United States
Area served	Worldwide
Key people	James McCoy, Jack Swartz, and Raymond Niedzwiecki (founders)
Products	Hard disk drives
Owner	Seagate Technology

Maxtor is aportmanteauofmaximum and storage.

History

Overview

In 1981, three formerIBMemployees began searching for funding, and Maxtor was founded the following year. In 1983, Maxtor shipped its first product, the Maxtor XT-1140. In 1985, Maxtor filed itsinitial public offeringand started trading on theNew York Stock Exchangeas "MXO." Maxtor bought hard drive manufacturerMiniScribein 1990. Maxtor was getting close to bankruptcy in 1992 and closed its engineering operations inSan Jose, California,in 1993. In 1996, Maxtor introduced its DiamondMax line of hard drives withDSP-based architecture. In 2000, Maxtor acquiredQuantum's hard drive division, which gave Maxtor theATA/133hard drive interface and helped Maxtor revive its server hard drive market. In 2006, Maxtor was acquired bySeagate.

Early financing

An early Maxtor hard drive (right) with a more modern laptop hard drive and coins (front) for size comparison

The Maxtor founders, James McCoy, Jack Swartz, and Raymond Niedzwiecki—graduates of theSan Jose State UniversitySchool of Engineering and former employees of IBM—began the search for funding in 1981. In early 1982, B.J. Cassin and Chuck Hazel (Bay Partners) provided the initial $3 million funding and the company officially began operations on July 1, 1982. In February 1983, it shipped its first product to Convergent Technology and immediately received an additional $5.5 million in its second round of funding. The company also began negotiations with the EDB (Economic Development Board) of Singapore for favorable terms before committing to Singapore as its offshore manufacturing location. The DBS (Development Bank of Singapore) agreed to provide financing to help grow the company in Singapore. In 1983, the company established a liaison andprocurementoffice in Tokyo, headed by Tatsuya Yamamoto.

Maxtor's product architecture used eight disks; 15 surfaces recorded data and the final surface was where the servo track information was located. The company developed its ownspindlemotor, which was fitted within the casting containing the disks. This was a major departure as the spindle motor was usually mounted external to the disks. The first product was designed to provide 190 MB of storage, but delays in getting magnetic heads to the Maxtor design resulted in the company taking what was available, and the first drive—the XT-1140—was shipped with a capacity of only 140 MB. The company received an additional round of financing of approximately $37 million in 1984 before going public in 1985, withGoldman Sachsas the primeunderwriter.

Expansion

In December 1986, Maxtor acquired U.S. Design Corporation, a loss-making manufacturer of data storage subsystems for microcomputers, for $16.1 million in astock swap.The acquisition was finalized in January 1987.In June 1987, Maxtor purchasedStorage Dimensions,a maker of high-performance, high-capacity HDD subsystems for theIBM PC(which chiefly made use of Maxtor's own drives), for an undisclosed sum.The acquisition was a success story for Maxtor, and the subsidiary had grown to generate $80 million in sales by 1992.That year, Maxtor sold off Storage Dimensions to private investors.

In 1990, Maxtor entered the mass market with its purchase of the assets (but not the liabilities) of bankruptMiniScribeinLongmont, Colorado.The transition was a tough one as the early products of this union (notably the 7120AT 3.5-inch 120 MB drive) had many quality and design problems. Later products managed to sell well despite the initial problems. In 1996, the company completely redesigned its hard drive product line by introducing its DiamondMax series with aTexas Instrumentsdigital signal processor.

Financial troubles

After nine years of development, the original XT-series of drives had achieved a capacity of 1 GB. Maxtor sold the rights to the series to Sequel ofSanta Clara, Californiain the mid-1990s, and the company exited the server drive market. Sequel, a spin-off ofUnisys,was not a disk drive manufacturer; rather, they specialized in refurbishing drives for the existing customer base. Teetering on the brink of bankruptcy in 1992, Maxtor's exit from the high-capacity 5.25-inch SCSI market temporarily left a product void in the industry. Around this time,SCSIversions of the 7000 series drives were also discontinued, and all engineering operations in San Jose were shut down in late 1993, leaving only the former MiniScribe design engineering staff. After turnover in the executive staff, Maxtor decided it had made a mistake, and when Maxtor moved its headquarters toMilpitas, California,it gradually began to rebuild its engineering staff.

Acquisition of the Quantum hard drive division

In late 2000, Maxtor acquired the hard drive business ofQuantum.The merger, which was completed on April 1, 2001, made Maxtor larger than its rivals, notably Seagate, and returned it to the server hard drive market and also implemented the ATA/133 interface into its hard drives.

Maxtor OneTouch III Mini Edition

Focus on external drives

Like many other hard drive manufacturers, Maxtor had been expanding in recent years into the external hard drive market. ItsMaxtor One-Touch IIexternal hard drive was marketed as convenient storage for the home user. Maxtor entered and became dominant in consumer business as result of a marketing strategy for the OneTouch line.The OneTouch is a high-capacity (500 GB to 1 TB) USB drive with a single-press button to back up and mirror the computer's hard drive. The line became the best-selling consumer device in the computer segment with several million devices distributed globally.

Maxtor had initially made efforts to get into the 2.5-inch hard drive market, but in the beginning of 2005, new management made the surprising decision to discontinue development in this field. This was considered by many industry watchers to be a particularly peculiar move, since the market for such hard drives (mainlynotebook computersandMP3 players) was already experiencing rapid growth, with no signs of slowing down in the foreseeable future.

Acquisition by Seagate

In a deal worth nearly US$2 billion,Maxtor was acquired by its rival Seagate in 2006.The Maxtor brandwas revived by Seagate in later 2016,although the former Maxtor factory inSuzhou, China,was wound down in 2017.

Competitors

• Adaptec
• Fabrik Inc.
• Hitachi Global Storage Technologies
• I Omega
• Samsung
• Western Digital