8-KRegulation FD

WESTERN DIGITAL CORP 8-K Report, Regulation FD Disclosure (Jun 12, 2006)

Filed June 12, 2006For Securities:WDC

Summary

Western Digital Corporation (WDC) filed an 8-K on June 12, 2006, to provide investors with an update on industry conditions and the company's expectations for the current quarter. The report indicates that demand in the desktop and notebook hard drive markets is seasonally soft, though this is being partially offset by demand in the PVR/DVR market. Pricing is also reflecting seasonal trends, with declines at the higher end of historical patterns. Inventory levels across the distribution channel, for both the industry and WDC, are being managed effectively and remain within the acceptable range of 4 to 6 weeks.

Key Highlights

  • 1Desktop and notebook hard drive demand is seasonally soft for the June quarter.
  • 2Demand in the PVR/DVR market is providing some offset to seasonality.
  • 3Industry and WDC inventory levels are well-managed, within the 4-6 week target range.
  • 4Pricing trends are exhibiting anticipated seasonal declines, albeit at the higher end of historical patterns.
  • 5The company's new technology programs are progressing as planned.
  • 6Media supply (particularly glass media) is expected to remain tight through the end of the calendar year.
  • 7WDC remains optimistic about the long-term fundamentals and growth drivers for the hard drive industry and the company.

Frequently Asked Questions

The report indicates a seasonally soft demand in the desktop and notebook hard drive markets for the June quarter. However, this is partially mitigated by demand from the PVR/DVR sector. While pricing is declining seasonally, it's within historical norms. The company is optimistic about the long-term outlook.

Western Digital is reporting that both industry-wide and company-specific inventory levels are well-managed and within their long-stated acceptable range of 4 to 6 weeks. This suggests a controlled supply chain environment.

Yes, the company anticipates that the supply of media, specifically glass media, will remain tight through at least the remainder of the calendar year. This could potentially impact production or costs.

The report states that the company's new technology programs are continuing to progress on plan, indicating ongoing innovation and development efforts which are crucial for future competitiveness.