around a motor-driven spindle hub that rotates the disks comprise the disk-pack assembly. The disk is made up of a
smooth substrate on which thin layers of magnetic materials are deposited. The head stack assembly ("HSA") is com-
prised of a magnetic positioner and a pivot-arm module on which the individual heads, including suspension, are
mounted. Each disk has a head suspended directly above it, which can read data from or write data to the spinning disk.
trols the motor and HSA positioner, and a System on Chip comprised of a drive interface, controller and recording
channel. The drive interface receives instructions from the host computer, while the controller directs the flow of data
to or from the disks and controls the heads. The location of data on each disk is logically maintained in concentric
tracks divided into sectors. The host computer sends instructions to the controller to read data from or write data to
the disks, based on logical track and sector locations. Guided by instructions from the controller, the HSA pivots in an
arc across the disk until it reaches the selected track of a disk, where the data is recorded or retrieved.
face of the disk per unit area. Head and magnetic media technologies are two of the key components affecting areal
density. As areal density increases, achieving a given drive capacity potentially reduces product costs over time
through reduced component requirements. We are vertically integrated in these two most important technology
components of hard drives (heads and magnetic media). We also invest considerable resources in research and
development, manufacturing infrastructure and capital equipment of head and magnetic media components, in order
to secure our competitive position and cost structure.
number of megabytes or GB of semiconductor media in the solid-state drive.
demand, facilitates inventory management and allows us to achieve lower costs through purchasing economies. This
platform strategy also enables our customers to leverage their qualification efforts onto successive product models. For
a discussion of risks related to technological innovations, see Item 1A of this Annual Report on Form 10-K.
States ("U.S.") companies but do not include sales to U.S. subsidiaries of foreign companies, represented 81%, 83%
and 81% of our net revenue for 2012, 2011 and 2010, respectively. Sales to international customers are subject to
certain risks not normally encountered in domestic operations, including exposure to tariffs and various trade regu-
lations. For a discussion regarding the risks related to sales to international customers, see Item 1A of this Annual
Report on Form 10-K.
relationships through direct communication and providing information and support through our Web site. In accord-
ance with standard storage industry practice, we provide distributors and retailers with limited price protection and
programs under which we reimburse certain marketing expenditures. We also provide distributors, resellers and
OEMs with other sales incentive programs.