![]() ![]() ![]() ![]() It is reducing capital expenditure across flash and HDD to lower production output. Western Digital reduced flash wafer starts by 30 percent from January, and has lowered client hard drive capacity output by approximately 40 percent by consolidating and idling certain media production lines in Asia. The year-over-year decline was driven by lower retail hard drive shipments and pricing pressure in flash. Sequentially, the increase was driven by a seasonal uptick in both retail hard drives and flash. Consumer represented 26 percent of revenue.Sequentially, the decline was driven by pricing pressure across flash products as well as lower client SSD shipments for PC applications. Client represented 35 percent of total revenue.The year-over-year decline was primarily due to inventory digestion in hard drives. Sequentially, capacity enterprise drives sold to cloud and smart video customers both declined due to lower demand in China. Cloud was 39 percent of total revenue.Segment summaryĬloud nearline HDD sales have fallen drastically (top chart) and HDD unit shipments are continually sliding down Disk exabyte shipments decreased 35 percent quarter-on-quarter. Western Digital said 12.9 million disk drives were shipped, 40 percent fewer than a year ago. Bit shipments actually rose 20 percent compared to last quarter but lower prices more than compensated for that. These actions, including strategically reducing our capital expenditures across both flash and HDD and our operating expenses, as well as amending our financial covenants and securing recent financings, will give us the financial flexibility and optionality to weather this cycle.”įlash revenues were $1.66 billion, down 36 percent year-on-year, while HDD revenues of $1.45 billion decreased 34.5 percent annually. ![]() What’s Goeckeler’s company doing about this? “We continue to take action to reset the business in response to the post-pandemic environment by optimizing our cost structure and strengthening our liquidity. Cash and cash equivalents: $1.87 billion.Free cash flow: -$240 million ($631 million a year ago).Operating cash flow: $35 million down 95 percent Y/Y.EPS: -$1.40 compared to $1.79 last year.Gross margin: 17.0 percent, down from 32.8 percent a year ago.WD CEO David Goeckeler pointed out: “The Western Digital team delivered revenue at the high end of our guidance range, despite a challenging flash price environment and continued cloud inventory digestion.” Both disk drive and SSD revenues were down as some public cloud and enterprise buyers paused spending, cloud customers used existing HDD inventory, and flash prices decreased. The HDD revenue fall echoes Seagate’s 39 percent revenue fall in its latest quarter. Revenues of $3.11 billion for the three months ended December 31 just beat WD’s $3.1 billion guidance for the quarter, and it recorded a loss of $446 million, compared to a profit of $546 million a year ago and $27 million last quarter. Update: Analyst note section re $900 million investment added below. It’s also taken in a $900 million equity investment from activist investor Elliott Management and private equity business Apollo Global Management with a view to splitting the business. Western Digital has reported a drop in revenue of 36 percent annually for the second quarter of the dirve maker’s FY23, surpassing its Q1 fall of 26 percent. ![]()
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