Western Digital 1998 Annual Report Download - page 8

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3
THE INFORMATION CONTAINED IN THIS REPORT INCLUDES FORWARD-LOOKING STATEMENTS.
WHEN USED IN THIS REPORT, THE WORDS "ANTICIPATES," "BELIEVES," "EXPECTS," "INTENDS,"
"WILL," "FORECASTS," "PLANS," "FUTURE," "STRATEGY," OR WORDS OF SIMILAR IMPORT ARE
INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS. OTHER STATEMENTS OF THE
COMPANY'S PLANS AND OBJECTIVES MAY ALSO BE CONSIDERED TO BE FORWARD-LOOKING
STATEMENTS. SUCH STATEMENTS ARE SUBJECT TO CERTAIN RISKS AND UNCERTAINTIES WHICH
COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE EXPRESSED IN THE
FORWARD-LOOKING STATEMENTS. READERS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON
THESE FORWARD-LOOKING STATEMENTS, WHICH SPEAK ONLY AS OF THE DATE HEREOF. THE
COMPANY UNDERTAKES NO OBLIGATION TO PUBLISH REVISED FORWARD-LOOKING STATEMENTS
TO REFLECT EVENTS OR CIRCUMSTANCES AFTER THE DATE HEREOF OR TO REFLECT THE
OCCURRENCE OF UNANTICIPATED EVENTS. READERS ARE URGED TO CAREFULLY REVIEW AND
CONSIDER THE VARIOUS DISCLOSURES MADE BY THE COMPANY TO ADVISE INTERESTED PARTIES
OF CERTAIN RISKS AND OTHER FACTORS THAT MAY AFFECT THE COMPANY'S BUSINESS AND
OPERATING RESULTS, INCLUDING THE DISCLOSURES MADE UNDER THE CAPTION "MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS" IN THIS
REPORT, AS WELL AS THE COMPANY'S OTHER PERIODIC REPORTS ON FORMS 10-K, 10-Q AND 8-K
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.
The Company's fiscal year is a 52 or 53-week year ending on the Saturday nearest June 30. The 1996, 1997 and
1998 fiscal years ended on June 29, June 28, and June 27, respectively, and consisted of 52 weeks each.
Unless otherwise indicated, references herein to specific years and quarters are to the Company's fiscal years and
fiscal quarters.
The Company's principal executive offices are located at 8105 Irvine Center Drive, Irvine, California 92618; its
telephone number is (949) 932-5000 and its web site is http://www.westerndigital.com. The information on the web
site is not incorporated in this report.
PART I
Item 1. Business
General
Western Digital Corporation (the "Company" or "Western Digital") designs, develops, manufactures and markets a
broad line of rigid magnetic disk drives ("hard drives") for use in desktop personal computers ("PCs") and, since
1997, in high-performance workstations, LAN servers and multi-user ("enterprise") systems. The Company is one of
the top four independent manufacturers of hard drives. It is a leading manufacturer of hard drives for desktop PCs, and
it is the Company's goal to become a leading manufacturer of hard drives for enterprise systems. The Company's
products currently include 3.5-inch form factor hard drives ranging in storage capacity from 2.0 gigabytes ("GB") to
10.1 GB. The Company sells its products worldwide to original equipment manufacturers ("OEMs") for inclusion in
their computer systems or subsystems, and to distributors, resellers and retailers.
Strategic Business Development
In June 1998, the Company and IBM Corporation ("IBM") entered into a broad-based hard drive component
supply and technology licensing agreement ("IBM Agreement"). The IBM Agreement enables the Company to
incorporate IBM's industry-leading technology, designs, and hard drive components into the Company's desktop PC
products while giving IBM the benefit of the Company's high-volume manufacturing expertise and improved access to
the high-volume PC market for its heads and drive components. Initially, the Company intends to combine IBM's
research and development with its own technology and manufacturing capabilities to design and produce desktop PC
hard drives that incorporate IBM's industry-leading giant magneto-resistive ("GMR") heads. The Company expects
these products to reach the market within the first six months of calendar 1999. The IBM Agreement permits the
Company to utilize other technologies developed by IBM and to market products incorporating IBM technologies,
simultaneously with IBM's own use of these technologies. The Company expects that access to IBM's hard drive