Expansion outside the U.S.

and acquisitions spurred rapid

growth for the industry.

Overseas Expansion

As computing evolved and became more sophisticated, the market demanded ever-
increasing amounts of hard drive storage. To meet demand and lower costs, the company
in the 1980s and 1990s expanded globally into Asia and Europe, as well as various other
U.S. locations. This growth reflected Shugart's strategy of "vertical integration," or
owning the design and manufacturing of key components. Vertical integration would
serve Seagate well, allowing it the scale and leverage to weather a major industry slump
in the mid-1980s and the tough, bloody battles for industry dominance that would
continue through the 1990s.

Following its initial public offering in 1981, Seagate took its first steps in creating a
global, vertically integrated operation by opening a board assembly facility in Singapore
in 1982, followed by drive assembly operations in 1983. In 1982, the company's sales
totaled $40 million, representing about half the market at that time. The following year,
Seagate also established a presence in Thailand, employing 50 people making head stack
assemblies. In 1984, the first overseas design facility was opened in Science Park,
Singapore. That same year, Seagate's revenue hit $344 million. By 1987, the company
employed 15,000 people and achieved a record $958 million in revenue. The following
year, the Teparuk, Thailand, facility was established to manufacture head stack and head
gimbal assemblies.

In the late 1980s, manufacturers began transitioning from 5¼ to the 3.5-inch form factor,
and the company's revenues were pressured until the transition to this new form factor
was made. In the early 1990s, lower-priced, higher-capacity computers grew in
popularity, driving a new wave of production and profits in the hard drive industry,
although pricing pressures soon kicked in amid fierce competition. During this era,
Seagate shifted its emphasis from low-cost volume manufacturing to product innovation,
investing in new products, technologies and product capabilities. By 1996, Seagate
reached $8.59 billion in revenue.

Also during this period, Seagate made one of its most important acquisitions in buying
Imprimis, a former subsidiary of Control Data, in October 1989. This acquisition secured
for Seagate vital strategic capabilities including recording heads design and
manufacturing, and Imprimis' expertise in hard disk design, especially in the high-
performance, high-capacity portion of the market. See "Growth of Business by
Acquisition," below, for more information.

Seagate's overseas expansion continued with the 1993 opening of a wafer plant in
Springtown, Northern Ireland. The company soon expanded into China with the opening
in 1995 of the Wuxi facility. The following year, Seagate began operations at the Korat,
Thailand, facility to produce hard drives as well as three key components: sliders, head
gimbal assemblies and head stack assemblies. In 1997, Seagate's European presence
expanded with the opening of a substrates facility in Limavady, Northern Ireland. Also
that year, Seagate opened its first of three media plants in Woodlands, Singapore (the
other two to follow in 2006), followed by a substrates plant in Johor, Malaysia, in 2007.

The company also has sales offices in all geographies, a distribution facility in the
Netherlands and maintains its administrative headquarters in Scotts Valley.

Over the years, the company's geographical footprint has both grown and consolidated as
economic conditions waxed and waned. Seagate at various times has operated additional
facilities in Asia, Europe and North America beyond those described above.