Western Digital Corporation
(
WDC
) is a leading manufacturer and developer of storage products
that helps create, manage, experience and preserve digital content.
The company is designs and manufactures storage devices, networking
equipment and home entertainment products under the WD (Western
Digital), HGST (Hitachi Global Storage Technologies) and
G-Technology brands. The company serves markets addressing storage
opportunities for enterprise and cloud data centers, client,
consumer electronics, backup, the internet and other emerging
markets such as automotive and home and small office
networking.
We have broken down Western Digital into three divisions:
1) PC, Tablet and Laptop Storage - 38%
2) Enterprise and Cloud Storage and Networking - 31%
3) TV, DVR and External Storage - 20%
See Our Full Analysis Of Western Digital
The company functions as two independent subsidiaries due to
regulatory requirements - WD (Western Digital) and HGST (Hitachi
Global Storage Technologies). Its principal products today are
hard drives that use one or more rotating magnetic disks to store
and allow access to data. Its hard drives are used in desktop and
notebook computers, corporate and multiple types of data centers,
home entertainment equipment and stand-alone consumer storage
devices. The company's other products include solid-state drives,
home entertainment and networking products and software
applications for smart phones and tablets.
In the enterprise application market, its products are designed
for servers, mainframes and workstations. The client compute
application products are designed for desktop and notebook
computers, to be used as primary storage in these devices and
Western Digital supplies to manufacturers of these laptop
computers. In the client non-compute application product line,
products are designed for a wide variety of personal and end user
devices such as cameras, digital video recorders, gaming consoles,
personal data backup systems, portable external storage systems and
digital media systems. It also provides data storage services
for SME's which include online backup, data protection and recovery
solutions.
Business Snapshot
The Enterprise and Cloud Storage division caters to businesses
and institutional clients and its solutions are designed for
mission critical. Mission critical applications are applications
that are vital to the day-to-day operations of an enterprise, and
these solutions require high performance and highly reliable
storage solutions. These are also high capacity storage devices and
have around-the-clock support. The market for mission critical
enterprise storage solutions will continue grow as enterprises try
to save energy costs and reduce network complexity by moving
network traffic to dedicated storage area networks. These solutions
are high performance enterprise class disk drives with
sophisticated firmware and communications technologies.
The PC, Tablet and Laptop storage division or Client Compute
applications are solutions designed for desktop, notebook and
netbook storage applications. The increase in demand due to growing
economies, and the continued proliferation of digital content are
the primary drivers of the client compute market. One of the
factors mitigating this growth is the advent of storage of
digital content in the cloud. Many client compute applications now
require less built-in storage (such as tablets and Ultrabooks) and
SSDs are becoming more competitive within the client compute
market. SSDs are also becoming more competitive as mobile computing
devices such as netbooks and Ultrabooks are transitioning to
smaller and thinner form factors, which can be served only by the
SSD market.
The TV, DVR and External Storage or client non-compute
applications are storage solutions designed for consumer electronic
devices such as media recorders and disk drives used for external
storage such as a portable external disk and network-attached
storage (NAS). Consumer electronic storage devices are used in
applications such as gaming consoles, DVRs and devices which
require high capacity and low cost per GB. External and NAS devices
are used in personal data backup and portable external storage to
augment storage capacity in the consumer's current desktop or
notebook. Consumer electronics includes devices used to
display media at home for personal media consumption. These
solutions are being used to leverage the proliferation high
definition and media-rich digital content.
We currently have a
$61.50 Trefis Price Estimate for Western
Digital
, which is 25% above its market price. In the following articles we
explain key risks to our valuation, trends driving the company and
storage industry as a whole and other key factors affecting our
valuation of the company.