Western Digital Investment Thesis

Western Digital Corporation develops, manufactures, and sells data storage devices and solutions in the United States, China, Hong Kong, Europe, the Middle East, Africa, rest of Asia, and internationally. It offers client devices, including hard disk drives (HDDs) and solid state drives (SSDs) for computing devices, such as desktop and notebook personal computers (PCs), smart video systems, gaming consoles, and set top boxes; flash-based embedded storage products for mobile phones, tablets, notebook PCs, and other portable and wearable devices, as well as automotive, Internet of Things, industrial, and connected home applications; and flash-based memory wafers. The company also provides data center devices and solutions comprising enterprise helium hard drives; enterprise SSDs consisting of flash-based SSDs and software solutions for use in enterprise servers, online transactions, data analysis, and other enterprise applications; data center solutions for data storage systems and tiered storage models; and data storage platforms. In addition, it offers client solutions, such as external HDD storage products in mobile and desktop form; client portable SSDs; removable cards that are used in consumer devices comprising mobile phones, tablets, imaging systems, and cameras and smart video systems; universal serial bus flash drives for use in the computing and consumer markets; and wireless drive products used in-field back up of created content, as well as wireless streaming of high-definition movies, photos, music, and documents to tablets, smartphones, and PCs. The company sells its products under the G-Technology, SanDisk, and WD brands to original equipment manufacturers, distributors, dealers, resellers, and retailers. Western Digital Corporation was founded in 1970 and is headquartered in San Jose, California.

Western Digital (WDC): The Great Divorce

1. Executive Summary

Western Digital is essentially two companies: a Flash/SSD business (NAND) and a Hard Drive business (HDD). The thesis is purely an "Event-Driven" play: the imminent spin-off of the Flash business will unlock shareholder value by removing the conglomerate discount.

Key Thesis Points

The Split: Separating volatile Flash from steady HDD allows investors to value each asset correctly.
HDD Duopoly: Along with Seagate (STX), WDC controls the booming data center HDD market. AI generates data, but storing that data economically requires HDDs, not just expensive SSDs.
Cyclical Recovery: Both NAND and HDD pricing are recovering from a historic glut.

2. Business Overview

Flash (SanDisk): Consumer SSDs, Enterprise SSDs. Highly competitive.
HDD (HGST/WD): Near-line drives for cloud hyperscalers. High barrier to entry.

3. Risks

Deal Failure: If the spin-off is blocked or taxes are prohibitive, the stock dumps.
Flash Pricing: Chinese competition (YMTC) is driving NAND prices to zero over the long term.

Western Digital Investment Thesis

Western Digital (WDC): The Great Divorce

1. Executive Summary

Key Thesis Points

2. Business Overview

3. Risks

WDC Valuation Model

The Kioxia Merger: Arbitrage Opportunity?

WDC Deleveraging: Path to Investment Grade

Enterprise SSD: WDC vs Samsung

WDC Split: Sum of the Parts Analysis

The NAND Pricing Cycle: From Glut to Shortage

Investment Memo: WDC/STX - The Future of Storage

Valuation Report: WDC (WDC)

Western Digital Corporation (WDC)

WDC: Navigating the Memory Megatrend - A Compelling Play on Capacity Demand

WDC: Navigating the Memory Megatrend - A Compelling Play on Capacity Demand