Western Digital Expects 11% Demand Drop for HDDs in Third Quarter

WD Lowers Revenue Expectations for Ongoing Quarter

by Anton Shilov
09/14/2012 | 01:42 PM

Western Digital, the world's largest maker of hard disk drives, said on Thursday that due to lowering demand towards personal computers in the third quarter 2012, total available market for hard disk drives (HDDs) will be 11% lower than originally expected. As a result, the company lowered its estimates for the quarter that ends on September 28, 2012.

 

WD said that it now expects the industry’s total available market (TAM) for hard drives in the September quarter to be approximately 140 million units versus its earlier forecast of 157 million units, due to muted demand and inventory rebalancing. As a result, the company now expects revenue for its first quarter ending September 28, 2012, will be approximately $3.9 billion to $4.0 billion, compared with its previous expectation of $4.2 billion to $4.3 billion. The company continues to estimate its gross margin for the September quarter to be approximately 30% on a non-GAAP basis.

Earlier this month Intel Corp. also lowered its revenue expectations for the quarter, citing slowing demand during back-to-school season as well as weak demand for personal computers in general in well-developed countries.

It is interesting to note that unlike manufacturers of dynamic random access memory (DRAM), hard drive makers are reluctant to lower prices on hard disk drives in a bid to spur demand towards storage devices in the channel and in the retail.