Benzinga  Jul 19  Comment 
Summit Redstone analyst Kinngai Chan’s latest channel checks on the semi space show headwinds ahead for most of the industry. The analyst believes only NVIDIA Corporation (NASDAQ: NVDA) and Western Digital Corp (NASDAQ: WDC) are in position to...
Channel News Asia  Jul 19  Comment 
Toshiba Corp said it resumed blocking access by Western Digital Corp to data at their memory chip joint venture, amid a feud over the Japanese company's planned auction of the chip business.
SeekingAlpha  Jul 19  Comment 
Channel News Asia  Jul 18  Comment 
Western Digital Corp's top executive is in Japan to meet government officials, aiming to resolve a dispute with Toshiba Corp over the Japanese company's planned sale of its chip business, sources familiar with the matter said on Tuesday.
New York Times  Jul 18  Comment 
The company’s stock rose after a U.S. hedge fund said it had added a stake and Western Digital did not gain an immediate injunction.
Benzinga  Jul 15  Comment 
Jon Najarian spoke on CNBC's "Fast Money Halftime Report" about unusual options activity in Microsoft Corporation (NASDAQ: MSFT) and Western Digital Corp (NASDAQ: WDC). He said his favorite type of a trader to follow is somebody who has been...
Reuters  Jul 15  Comment 
A U.S. judge did not reach a decision Friday in Western Digital Corp's bid to temporarily block Toshiba Corp from selling its flash memory business in an $18 billion deal but proposed requiring Toshiba to give Western Digital two weeks' notice...
Reuters  Jul 14  Comment 
A U.S. judge did not reach a decision Friday in Western Digital Corp's bid to temporarily block Toshiba Corp from selling its flash memory business in an $18 billion deal but proposed requiring Toshiba to give Western Digital two weeks' notice...
SeekingAlpha  Jul 14  Comment 
Benzinga  Jul 14  Comment 
BTIG analyst Edward Parker believes Western Digital Corp's (NASDAQ: WDC) story is no longer price about, it is about culture. “While much of the daily drama seems moot if WD successfully wins injunctive relief to maintain the status quo, i.e....


Western Digital (NYSE: WDC) is a vertically integrated manufacturer of hard drives. Western Digitals main competitors are Seagate (STX) and Hitachi Global Storage (private company whole owned by Hitachi), all three are now about the same size in term of market share. The company produces drives for use in desktops, mobile devices, enterprise, and consumer electronics, and sells components to original equipment manufacturers (OEMs).

As the hard drive industry is fairly commoditized, intense competition from its competitors is ordinary. Competitors are Seagate and Hitachi Global Storage and the non-vertically integrated manufacturers: Samsung, Toshiba (TOSBF), and Fujitsu (FJTSY, who produce complete hard drive units but do not internally produce all main components (head, disc, gimbal assembly and channel decoder). These non-vertical integrated companies also have other products which they can use to offset a loss in their hard drive devisions.

Another source of competition comes from advances in solid state devices (SSDs) containing flash memory threaten WDC's core product offerings, because SSDs have many advantages over traditional hard drives, especially in mobile applications. However, in the third quarter of 2009 WDC acquired SiliconSystems, Inc, thereby entering the solid state harddrive market.[1]

In the second quarter of 2009, WDC began to design, develop, manufacture and sell media players. A media player is a device that connects to a user’s television or home theater system and plays digital movies, music and photos from any of our WD®-branded external hard drives or other USB mass storage devices.[1]

Company Overview

Western Digital's business has more than doubled in the past five years due to the growing demand for desktop drives, greater market share, and strong growth in other hard drive products, especially in the mobile and consumer electronics markets. The company has invested an increasingly greater percentage of its revenue in capital and research and development expenses. New product development is necessary to gain a foothold in new markets and to outpace the threat of competing flash memory.

Business Financials

In 2009, WDC earned a total of $7.5 billion in total revenues. This was a decline from its 2008 total revenues$8.1 billion. This had a negative impact on WDC's net income. Between 2008 and 2009, WDC's net income declined from $867 million in 2008 to $470 million in 2009.

Business Segments

Desktop hard drives

Western Digital's Caviar desktop hard drives are in the 3.5" form factor, range from 36 GB to 2 TB in storage capacity.

Mobile hard drives

Notebook hard drives are in the 2.5" form factor. Western Digital's Scorpio notebook drives range from 40 GB to 160 GB in storage capacity. The 1 TB drive is the company's newest mobile offering, and uses perpendicular recording technology.

Enterprise hard drives

Applications such as databases and e-commerce require especially high performance and reliable hard drives. Western Digital's Raptor enterprise-class drives rotate at a faster speed than consumer hard drives, allowing for faster data access. The company also offers a WD Caviar RE line with enhanced reliability features.

Consumer electronics

Western Digital offers hard drives designed for use in consumer electronics such as digital video recorders (DVR), karaoke systems, and gaming systems, which require quiet operation, low temperature and power consumption, and high reliability.

No complaints on this end, simlpy a good piece.

Comparison to Competitors

Western Digital controls 22% of the hard drive market, and its competitors are Seagate, Hitachi, Samsung, Toshiba, and Fujitsu.

The market is divided into "independent" and "captive" manufacturers. Western Digital and Seagate are independent manufacturers, meaning that they are entirely focused on manufacturing hard disk drives. Captive manufacturers Hitachi, Samsung, Toshiba, and Fujitsu are more diversified companies with a hard drive division. Captive competitors may sell hard drives at break even profit or even at a loss when it can bundle drives with other more profitable components, such as computer memory. This makes competition especially intense and sometimes irrational for independent manufacturers like Western Digital.

Due to the similarities in market share and business focus, Seagate and Western Digital are chief rivals in the market. The two companies' offerings cover 97% and 90% of the market respectively. Both companies produce desktop, mobile, enterprise, and consumer electronics products, and sell mainly to OEMs. Thus, many of the same market forces such as seasonal changes in sales and commoditization of PCs affect the two companies in the same ways.

One particularly important rising competitor to hard drives are flash-memory based solid state devices (SSDs). Unlike hard drives, flash memory are solid state, so they contain no moving mechanical parts, use less power, are smaller and less likely to break. These advantages make flash memory very attractive for use in portable devices such as digital music players and cameras. Flash memory has not replaced hard drives because cost is higher, transfer speeds are slower, and there is a limit of approximately 100,000 read/write operations. However, each of these limitations are being gradually overcome with technological advances. Samsung and SanDisk have announced or released SSDs up to 64 GB that have already began to replace hard drives in ultraportable laptops. Although hard drives are still the dominant storage device, SSDs represents an impending threat to Western Digital's business.

Western Digital has been slower than competitors to incorporate perpendicular recording into its products, which allows for greater data capacities and faster access speeds. Currently it has one product with the technology (160 GB Scorpio notebook drive).


  1. 1.0 1.1 WDC 10-K 2009 Item 1 Pg. 4
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