Western Digital Increases Investments into SSD Tech

WD Boosts SSD Investments

by Anton Shilov
10/23/2009 | 06:54 PM

Western Digital, a leading maker of hard disk drives that recently acquired a maker of flash-based drives, said that it would boost investments into creation of more advanced solid-state drives (SSDs).


“Our current spending reflects increased investments in technological advancements, new products and programs, and includes our recently acquired SSD business,” said Tim Leyden, chief financial officer of WD during the most-recent conference call with financial analysts.

Back in March Western Digital announced that it acquired SiliconSystems, a supplier of solid-state drives (SSDs) for the embedded systems market, for $65 million. WD in June released its first own-brand solid-state drive called SiliconDrive III, which was aimed at enterprise user.

Western Digital’s rival Seagate Technologies also started to ship its SSDs designed for enterprise users. Meanwhile, suppliers of flash-based products, such as SanDisk Corp., claims that flash-based storage will not go mainstream until 2011 – 2012 timeframe.

Western Digital this week reported revenue of $2.2 billion, record hard drive shipments of 44.1 million units and net income of $288 million, or $1.25 per share, for its first fiscal quarter ended October 2, 2009. In the year-ago quarter, the company reported revenue of $2.1 billion, unit shipments of 39.4 million, and net income of $211 million. The company generated $434 million in cash from operations during the first quarter, ending with total cash and cash equivalents of $2.1 billion.

"For the second consecutive quarter, demand for hard drives was stronger than expected as the positive industry conditions that materialized in the June quarter continued throughout the September quarter. We believe this demand is being driven primarily by consumers as a result of the growing social media phenomenon. This is creating demand in mobile and desktop PCs, branded products and enterprise storage. Hard drive inventories remain at historically low levels, reflecting industry discipline in managing supply and demand,” said John Coyne, president and chief executive officer.