Western Digital Corp. Citi’s 2026 Global TMT Conference

Yeah, thanks, Asya, for hosting us at this great event. Today I will be making some forward-looking statements based on management's current assumptions and expectations, including with respect to our product portfolio, business plans and performance, market trends. These forward-looking statements are subject to risk and uncertainty, so please refer to our Form 10-K and other filings with the SEC for more information on the risk and uncertainties that could cause actual results to differ materially from expectations. We also will be making some references to non-GAAP financials, and a reconciliation between GAAP and non-GAAP can be found on the investor relations section.

Great. With that. All right.

Back to you, Asiya. All right.

Yeah, that's a great question to start, and I've said this many times before, you can basically forget everything about hard disk drives and WD until I joined in May 2025. When you look at 3 years or 5 years or 10 or 20 years ago, the business was mostly consumer and PC client, where you have a lot of cyclicality. It depends on GDP, consumer confidence. It depends on the PC cycles and IT spending, and it's really a unit-based business. Fast-forward to today, 90% of our business is with the cloud, driven by massive amounts of data being stored in the cloud. You layer the AI cycle on top of that and the understanding by many of our customers that data becomes a lot more valuable. You're not really looking at cycles anymore as you've seen it before. It's more a secular growth business.

We have great visibility in the demand side. We talk to our customers. We have earned our seat at the table being a critical component to this AI data center build-out. We have longer-term visibility, right? Customers are asking to sign LTAs all the way till 2030 and 2031. We haven't signed them yet, but that's the visibility that we have, again, being a strategic component and having earned that seat at the table. This is a totally different business.

Yeah. Currently, we don't see a digestion. It's actually the opposite. Every time we go and talk to our customers, myself or my CEO or our salespeople, they come back with a stronger demand signal.

Right? A stronger demand signal and better visibility for longer term, right? Today, and we have been very clear about that, we do believe that the exabyte demand growth, compound annual growth rate for the next five years is greater than 25%. Actually, currently, I think it's a lot greater than 25%. We can't supply more than 25% right now, year-over-year growth in exabyte. But the demand is there. The demand is strong. The visibility is good. We don't see any digestion right now. There is a lot of compute power that's being put in place.

the CapEx spending of the hyperscalers keeps going up and will soon hit more than $1 trillion. The vast majority of that goes to the compute side. Data and HDD storage is slightly different, right? Because compute, you need a certain amount of compute to handle all the compute that needs to be done. But every time you use compute, the output of it is being stored. The data that is being generated by AI keeps compounding, even when you, so to speak, would stop adding more compute power to it. You will have to continue to add more HDD and storage. By the way, as you know, 80% of all data that is being generated is being stored on HDD. When you combine all of that, we continue to see strong demand for a very long period of time.

Yeah. First of all, again, I have been very clear about that. We do see exabyte demand greater than 25% compound annual growth rate over the next five years. By the way, this is a compound annual growth rate. That does not mean each and every year.