Strong results from disk drive makers look to strong PC market in 2010

Impressive Q4 results and a positive 2010 outlook from Seagate (STX) and Western Digital (WDC) last week support the prediction that this year will be strong for PC sales. It looks like the fundamentals for companies involved either in consumer or enterprise computer sales should do well this year. The Microsoft (MSFT) results due this week should be encouraging.

However, my holding in Micron Technology (MU) was hit hard last week finishing close to $9 despite this positive outlook on the markets in which it operates (DRAM chips). On Thursday,  Rambus Inc. (RMBS), the chip-design company, announced a major legal settlement with South Korea's Samsung Electronics. In the deal, Samsung (SSNHY) will pay Rambus $700 million over five years, and purchase $200 million of Rambus stock. Samsung, Micron and Hynix Semiconductor Inc that had been engaged in five and a half year litigation with Rambus over price fixing allegations. This leaves Micron potentially more exposed to a pay out after the Samsung settlement out of court.