Western Digital 1995 Annual Report Download - page 3

W D    . Revenues and
earnings grew to record levels in fiscal 1995 even though competition
remained intense, particularly in our core hard drive business. We were able
to gain hard drive market share, improve our financial position and earn an
important quality distinction last year, thanks to the dedication and hard
work of more than seven thousand Western Digital employees worldwide.
Our Microcomputer Products Group posted very satisfying results,
operating profitably throughout the year for the first time. This improvement was made in con-
cert with the conversion of the Group’s integrated circuit packaging and test plant in Malaysia to
hard drive production, which required a shift to complete reliance on external sources for compo-
nents. We have ambitious long-term growth goals for this operation.
The Company’s Personal Storage Group again set records in unit shipments and revenues.
Competition remains very tough in this part of our business, which has settled into a cluster of
five principal competitors. Western Digital ranks among the top producers of 3.5-inch hard
drives for personal computers, and indications are that our Personal Storage Group was a leader
in market share gains last year.
This very profitable and responsive operation, by far our largest, is regularly first to market
and first to volume in its industry’s unending product-development marathon. Its facilities are
being expanded, and its prospects are bright.
A third product group has been created to design and produce high-performance, high-
capacity hard drives. The market for these drives, currently with capacities of two gigabytes or
more, is being driven by strong demand from producers of workstations and servers. These
segments account for roughly 22 percent of the hard drive industry’s revenue and a greater por-
tion of its operating earnings. We are certain that Western Digital’s reputation for quality, relia-
bility, responsiveness and customer satisfaction will help our new product line take hold quickly.
This is an extremely important strategic step for our Company. A manufacturing facility for this
activity is now being prepared in Singapore and is scheduled to be in production by the end of
fiscal 1996.
The amount and quality of the competition in all our product lines require that the
Company maintain a regular flow of fresh, innovative products. With a goal of keeping
Charles A. Haggerty
Revenues
(in millions)
Operating Income
(in millions)
   To Our Shareholders:  .