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PART I
Item 1. Business
General
Western Digital Corporation (the ""Company'' or ""Western Digital'') operates as the parent company of
Western Digital Technologies, Inc. (""WDT'') and other subsidiaries. WDT designs, develops, manufactures
and markets hard drives, the Company's core business, featuring leading-edge technology. A hard drive is a
storage device found in most computers that stores data on one or more rotating magnetic disks that provide
fast access to data that must be readily available to users of computers or other devices. The Company's hard
drives are used in desktop PC's, entry level servers, network attached storage devices, video game consoles,
digital video recording devices, digital cable set-top boxes, satellite television boxes and audio/visual juke
boxes. The Company's hard drive products currently include 1.0-inch high, 3.5-inch form factor drives with
capacities ranging from 8 gigabytes (""GB'') to 100 GB, rotation speeds of 5400 and 7200 revolutions per
minute (""rpm'') and the Enhanced Integrated Drive Electronics (""EIDE'') interface. The Company sells its
products worldwide to computer manufacturers for inclusion in their computer systems or subsystems and to
distributors, resellers and retailers. The Company's hard drive products are currently manufactured in
Malaysia. In January 2000, the Company announced its decision to cease production of Small Computer
System Interface (""SCSI'') hard drives and closed its Rochester, Minnesota hard drive design center.
The Company continuously evaluates opportunities to apply its data storage core competencies to
emerging markets and to expand beyond the traditional market for hard drives through new business ventures
and market areas which meet certain predeÑned criteria. In February 1999, the Company acquired Connex,
Inc. (""Connex''), a San Jose-based startup company that designed network attached storage products. During
2001 the Company formed SANavigator, Inc. (""SANavigator'') to develop and market storage area network
(""SAN'') management. Subsequent to June 29, 2001, the Company sold substantially all of the assets of
Connex and SANavigator and, accordingly, discontinued these operations.
In February 2000, the Company formed SageTree, Inc. (""SageTree'') to design and market packaged
analytical software and related services for supply chain and product life cycle applications. In June 2000,
SageTree received a direct investment from NCR Corporation in exchange for a minority interest in
SageTree. For further discussion of SageTree, see under the heading ""Products Ì Products Developed by
SageTree'' and Part II, Item 7, under the heading ""Risk factors relating to Western Digital particularly.''
In February 2000, the Company also formed Cameo Technologies, Inc. (""Cameo'') to develop and
market technologies and services for delivering high-quality digital video content to PC users. Cameo entered
into an agreement with Universal Pictures in June 2001 to deliver Universal's promotional materials to
connected PC users. For further discussion of Cameo, see under the heading ""Products Ì Products
Developed by Cameo Technologies'' and Part II, Item 7, under the heading ""Risk factors relating to Western
Digital particularly.''
In October 2000, the Company formed Keen Personal Media, Inc. (""Keen PM'') to develop and market
interactive personal video recorder and set-top box software, services and hardware for broadband television
content management and commerce. Keen PM entered into a joint development agreement during October
2000 to develop and license its digital video recorder storage management subsystem software to ScientiÑc-
Atlanta. For further discussion of Keen PM, see under the heading ""Products Ì Products Developed by Keen
PM'' and Part II, Item 7, under the heading ""Risk factors relating to Western Digital particularly.''
The Company monitors the development of new markets related to data or content storage and storage
management, and communication of digital content and network intelligence, and may from time to time oÅer
new products or services to address appropriate new markets. Conversely, depending on the development of
such markets and the Company's ability to achieve its goals, the Company may, from time to time withdraw
from certain markets.
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