Atasi Corporation

Atasi Corporation

Company type	Private
Industry	Computer storage
Founded	1981
Founder	Frank C. Gibeau, Paul L. Farmer, Stanley F. Brown, Garold W. Plonczak
Defunct	1992
Fate	Acquired by Tandon Corporation and later Western Digital; ceased operations
Headquarters	San Jose, California , United States
Key people	Frank C. Gibeau (founder), Donald R. Lundell (president & CEO), Stanley F. Brown (CEO), David Morris (CEO of Atasi Technology)
Products	5¼-inch hard disk drives, including the Atasi 3000 series and MacServer external drives
Number of employees	500 (peak), 65 (at acquisition by Tandon)
Parent	Tandon Corporation (1986–1987), Western Digital (1987–1992)

Atasi Corporation was a manufacturer based in California specializing in 5¼-inch hard disk drives, established in 1981 by Frank C. Gibeau along with Paul L. Farmer, Stanley F. Brown, and Garold W. Plonczak. The firm was a pioneer in implementing closed-loop mechanisms, such as voice-coil actuators, aimed at the premium microcomputer segment.

Although Atasi gained early acclaim and saw product adoption within the industry, it struggled with ongoing financial difficulties, including unsuccessful contracts and eventual insolvency. The company was subsequently purchased by Tandon Corporation and later by Western Digital in 1987. It briefly resurfaced under the name Atasi Technology between 1990 and 1992, offering Apple-compatible external drives and rebranded versions of Priam products.

Establishment as Atasi Corporation

Atasi was incorporated in 1981, primarily founded by Frank C. Gibeau, who brought over 17 years of expertise from IBM, Memorex, and Verbatim’s hard disk divisions. The name "Atasi," selected by Gibeau for its Native American roots, was intended as a strategic branding choice to convey robustness and innovation within the competitive storage industry.

Early period/Frank Gibeau leadership (1981–1984)

Atasi set itself apart in the hard disk drive market by introducing closed-loop technology for controlling head positioning, contrasting with competitors who utilized slower and less dependable open-loop stepper motors. Founders Gibeau, Farmer, Brown, and Plonczak developed these advancements to enhance accuracy and minimize common issues like overheating and errors associated with stepper motor designs.

Atasi 3000 series

On August 16, 1982, Atasi unveiled its 3000 series of -inch hard disk drives featuring three models: the 3020 (20 MB), 3033 (33 MB), and 3046 (46 MB). These drives employed the widely accepted ST-506 interface standard. Pricing for the 3020 and 3033 models was set at $1470 and $1800 respectively, with production anticipated to increase by early 1983.

The 3000 series delivered an average access time between 30 to 60 milliseconds—a performance level previously limited to larger drives like IBM's 3380—and incorporated linear voice coil actuators paired with closed-loop servo controls to boost speed and precision. This approach allowed for higher storage densities of up to 800 tracks per inch, surpassing competitors using stepper motors that typically averaged an access time of 85 milliseconds.

In its marketing strategy directed at business clientele, Gibeau stressed the critical need for combining substantial storage capacity with rapid access speeds to support emerging multi-user environments and multitasking applications essential for office automation and local area network setups. Additionally, Atasi published technical materials ("Atasi White Paper") that detailed how their closed-loop designs effectively addressed challenges such as shock, vibration, and temperature fluctuations impacting drive reliability.

Unsuccessful takeover attempt by Seagate

In October 1983, Seagate Technology revealed intentions to purchase Atasi through a stock exchange valued at $131.4 million, involving 7.2 million shares priced at $18.25 each. The objective was to acquire Atasi's proprietary patents related to closed-loop voice coil technology. Nonetheless, the proposed acquisition was abandoned a month later when both parties determined that merging would not yield substantial financial advantages.

Introduction of Atasi 3065/3075 models

December 1983 saw Atasi unveil the AT-3065 and AT-3075 models, expanding its 3000 series lineup of 5¼-inch hard disk drives. These units offered storage capacities of 65 MB and 75 MB respectively, with average access times of 24 milliseconds. Priced at $1,800 and $1,950, they were slated for release in mid-1984.

Founder Gibeau departed from Atasi in early 1984 to assume the presidency of Epelocorp, a subsidiary under Xebec Corporation. Alan J. Grant took over as interim president until July.

Leadership under Donald R. Lundell (1984–1985)

Donald R. Lundell, who joined Atasi in 1982 as vice president of engineering after an 18-year tenure at IBM, was appointed president and CEO in July 1984, succeeding interim leader Alan J. Grant.

Financial challenges and patent disputes

Despite holding a backlog exceeding $100 million from clients such as Convergent Technologies and NCR by late 1984, Atasi grappled with financial instability. Elevated manufacturing expenses combined with difficulties in raising investment capital impeded profitability.

In November 1984, Atasi initiated a patent infringement lawsuit against Seagate Technology. The suit accused Seagate of misappropriating confidential information stemming from the aborted acquisition talks and unauthorized use of Atasi's dual coil linear actuator technology in Seagate’s ST4000 hard drives. Lundell also contemplated similar legal actions against other industry players like Tandon and Applied Storage Technology following proceedings against Priam Corporation.

By mid-1985, after extensive workforce reductions from 500 employees down to just 14 due to a downturn in the personal computer market and restricted credit access, Lundell pursued potential buyers for Atasi or its hard drive assets. In August 1985, Atasi filed for protection under Chapter 11 bankruptcy.

Agreement with Computer Memories

In October 1985, Computer Memories, Inc. intended to acquire Atasi’s closed-loop voice coil technology to broaden its product offerings after losing the IBM hard disk drive contract for the PC AT. However, on October 29, Computer Memories retracted from the acquisition deal, likely influenced by its own financial difficulties. The arrangement would have granted Atasi an initial payment of $1 million plus up to $5 million in royalties. Lundell expressed bewilderment regarding the deal’s cancellation. He resigned in November 1985 and took on the role of president at Aspen Peripherals Corporation in February 1986.

Tenure of Stanley F. Brown (1985–1987)

Stanley F. Brown, one of Atasi’s founders with two decades of experience in the hard disk drive sector and numerous patents, briefly joined Computer Memories as senior vice president in August 1985. Following the collapse of the acquisition, Brown returned as CEO to lead Atasi’s recovery from Chapter 11 bankruptcy. Founder Paul L. Farmer rejoined as vice president responsible for quality assurance.

Atasi’s main income source was contracts with French manufacturer Groupe Bull, supplying approximately 1,000 drives monthly. Brown’s approach emphasized cutting costs, establishing new supplier relationships, and relocating production operations to the Far East. On June 2, 1986, Atasi successfully emerged from bankruptcy after court approval of its reorganization plan.

Acquisition by Tandon and Western Digital

In December 1986, Tandon Corporation, a leading manufacturer of hard disk drives, announced its $5 million purchase of Atasi following the latter’s Chapter 11 restructuring. Computer Memories, Inc. had also expressed interest in acquiring Atasi but was ultimately outbid. This acquisition was intended to enhance Tandon’s disk drive offerings—while Tandon’s maximum capacity was 50 MB, Atasi provided drives with up to 170 MB capacity. Atasi, employing 65 staff members, became a wholly owned subsidiary under Tandon, with manufacturing operations relocating from San Jose to Tandon’s facility in Singapore. The existing patent infringement litigation from 1984 against Seagate Technology remained active. The transaction was completed in April 1987.

Later that same year, Tandon divested its hard disk drive segment, including Atasi, selling it to Western Digital for $49 million. This sale transferred Atasi’s patents and the San Jose production site to Western Digital. The deal was finalized in March 1988.

Revival under David Morris (1990–1992)

Atasi resurfaced in 1990 as Atasi Technology with Davis Morris assuming the role of CEO. Early in that year, the company introduced the MacServer—a 128 MB external hard drive designed for Apple computers, retailing at $799.

In March 1990, following Priam Corporation’s Chapter 11 filing, Atasi acquired Priam’s 5.25-inch hard drive product line and inventory for $5.2 million. Subsequently, Atasi rebranded these drives and marketed them with capacities reaching up to 1 GB.

Also in 1990, a patent infringement case against Seagate Technology was dismissed after Western Digital obtained the relevant patents and elected not to pursue the lawsuit further. By April 1992, Atasi Technology had ceased operations.

Trivia

• In December 1987, an AT-3085 hard drive reportedly dropped from an overhead luggage compartment during delivery to freelance writer Ken Milburn, who was assembling a 386-based computer. Despite the fall, the drive formatted successfully and operated without issues.

Model Table

Model no.	Released	Price (Release)	Units Sold (Est.)	Capacity	Size	Interface	Encoding	Spindle RPM
AT-3020	1982	$1,470	?	20 MB	5 1/4" Full	ST-506	MFM	3600 RPM
AT-3033	1982	$1,800	1-5,000 (1984)*	33 MB
AT-3046	1982	?	12,000+ (1984)*	46 MB
AT-3051	1984-1985(?)	?	51 MB
AT-3051+	?	54 MB
AT-3053	?	53 MB
AT-3065	1984	$1,800	65 MB
AT-3075	$1,950	?	75 MB
AT-3085	1986	?	85 MB	RLL
AT-3128	1986	?	128 MB
Rebranded Priam Drives
Atasi Gold	1990	$449	?	72 MB	?	MFM
519	?	140 MB	ST-412
519R	?	244 MB		RLL
638	?	382 MB	ESDI-10 MHz
676	$1,899	765 MB	ESDI-15 MHz
738	?	338 MB	SCSI
776	?	676 MB
6120	$2,995	1 GB	ESDI-24 MHz
7120	{ ?}	1 GB	SCSI		-	V130	{ ?}	?	30 MB	ST-506	?	-	V150	{ ?}	50 MB	-	V170	{ ?}	70 MB	-	V185	{ ?}	85 MB	-

See also

• List of defunct hard disk manufacturers
• History of hard disk drives
• Tandon Corporation
• Computer Memories, Inc.

External links

• Atasi Corporation via OpenCorporates
• Atasi Technology, Inc. via OpenCorporates