Sector: Information Technology | Focus: Technology Hardware, Storage & Peripherals
HQ: San Jose, California
Financial Risks
Western Digital faces risks related to global economic volatility, separation of HDD and Flash business units (operational, financial, and legal challenges), supply chain disruptions, litigation outcomes (including the MRT and SPEX lawsuits), tax liabilities (unrecognized tax benefits, potential changes in tax laws), and debt servicing (financial covenants, interest rate fluctuations). The sale of a majority interest in SanDisk Semiconductor (Shanghai) Co. Ltd. also carries risks related to working capital adjustments and valuations.
Financial Upside
Improved revenue and gross margin across segments, driven by increased demand and favorable product mix. The sale of SanDisk Semiconductor (Shanghai) Co. Ltd. is expected to reduce operating and capital expenditures. Potential tax savings from tax resolutions and favorable tax jurisdictions are also noted. Digital transformation, including AI, is expected to drive long-term data storage market growth.
