Western Digital 1999 Annual Report Download - page 4

Our first product in this series was
announced in March 1999, our second in
July 1999. From the start, it was and
remains one of the quietest and most shock-
resistant 10,000 RPM hard drives available
for enterprise computing platforms.
• We moved to diversify our business to
reduce our heavy dependence on personal
computers. Western Digital acquired Crag
Technologies, now named Connex, which
will produce products that allow companies
and workgroups to use simple network-
attached storage systems and to evolve into
the use of enterprise-wide storage area net-
works. Connex will bring ease-of-use and
high functionality to scalable, shared storage
solutions for original equipment manufac-
turers and value-added resellers.
• In another diversification move, we
formed an A/V Solutions line of business to
address the vast opportunity of this emerg-
ing market for rotating magnetic storage.
The growing importance of the Internet,
and rising demand for digital conveniences
in the home, create an environment that will
allow personal computers and various digital
home entertainment appliances such as the
new personal digital video recorders (DVR)
to be connected and interoperated in a
home network system. We have introduced
the WD Performer™line of hard drives to
address this market. Another part of our
effort in this area includes a strategic
partnership with Sony Corporation to
co-develop products for home entertainment
applications. We expect to have these
products in the market in the first half of
calendar year 2000.
• We intensified cost controls, further
refined manufacturing and logistics efficien-
cies, trimmed our build plan, and reduced
our workforce. During fiscal 1999, the com-
pany’s headcount declined by 21 percent.
• We sold Western Digital’s disk media
business to Komag and entered into an
agreement to buy a substantial portion of
our media from Komag, significantly reduc-
ing our capital requirements.
• After fiscal year-end, we restructured
operations and management into a line of
business and geographic organization that is
making WD much more responsive to our
markets resulting in faster and more focused
customer-oriented decision making.
• We moved to further develop our Chai
Chee, Singapore facility as a regional techni-
cal and manufacturing support center,
focusing most of its resources on value-
added engineering rather than volume
production. We are consolidating our high-
volume desktop hard drive production in
Malaysia to improve manufacturing efficien-
cies and costs. In addition to its engineer-
ing, technical and manufacturing-support
roles, the Chai Chee facility continues to
build our high-end WD Enterprise hard
drives. These moves take advantage of the
best features of both our Asian facilities.
By fiscal year-end 1999 we had
reduced total inventories, increased inventory
turns to a rate of 19 times a year, and
reduced our accounts receivable to an
average of 38 days’ sales outstanding. We
have improved our manufacturing yields,
regained time-to-market leadership, and
Western Digital