Western Digital (WDC)

Item 2.05 Costs Associated with Exit or Disposal Activities.

On March 20, 2008, Western Digital Corporation (the "Company") announced that the majority of its media and substrate supply obligations to external customers related to its acquisition of Komag in September 2007 will be fulfilled by May 2008, as planned, and that consequently the Company will streamline its media and substrate operations to serve only its own hard drive business. A copy of the press release making this announcement is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

As part of the realignment of media manufacturing resources, the Company will focus its Penang, Malaysia facilities solely on the production of magnetic media, while substrate plating and polishing operations, currently in Penang, will be consolidated into the Company’s two other Malaysian substrate facilities in Kuching and Johor Bahru, maximizing operational efficiencies. Additionally, some positions in the Company’s San Jose, California, development and media operations facility will be affected with the cessation of external business. As a result of these actions, the Company will reduce its labor force by approximately 800 employees, approximately 770 in Malaysia and approximately 30 in the United States, representing less than 2 percent of the Company’s total worldwide employee population of approximately 42,500.

The total cost of these actions is currently estimated to be approximately $16 million, consisting of termination benefits of $8 million and asset impairment charges of $8 million. Of these amounts, approximately $8 million will result in future cash expenditures. The portion of these costs, if any, that will be charged against the Company’s third quarter operating results and the portion, if any, that will be reflected as an adjustment to the Komag acquisition purchase price allocation is still being determined and will be separately disclosed during the Company’s third quarter earnings release conference call in April 2008. To the extent the costs meet the criteria of Emerging Issues Task Force Issue No. 95-3, Recognition of Liabilities in Connection with a Purchase Business Combination, the costs will not impact earnings.