Accorind to Cnet, Maxtor said Monday that it has decided not to go ahead with previously announced plans to make a 2.5-inch disk drive and would take charges of $5.4 million to $7 million as a result.
Maxtor said it made its decision on Jan. 18, adding that it expects to spend $7.6 million to $9 million to pay third-party vendors for tooling, equipment, and component parts inventory related to the suspended disk drive. A company representative was not immediately available for comment.
Two-and-a-half-inch disk drives are used in notebook personal computers to store software programs and data. Toshiba and Hitachi are among the biggest makers of the small drives. Seagate Technology not long ago re-entered the business.
Maxtor had planned to introduce the disk drive in 2005, the company said in a filing with the U.S. Securities and Exchange Commission. Shares of Maxtor fell 20 cents, or 4.4 percent, to close at $4.36 on the New York Stock Exchange.