Western Digital 2014 Annual Report Download - page 16

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Industry-standard interfaces allow the drives to communicate with the host system. The primary interface for
PCs is SATA and the primary interfaces for enterprise systems are Fibre Channel, SAS, SATA and PCIe.
Solid-State Drives
SSDs use semiconductor, non-volatile media, rather than magnetic media and magnetic heads, to store and allow
fast access to data without any moving parts. The cost per bit of solid-state drives is more expensive than hard drives,
but the higher input/output (“IO”) performance makes solid-state drives an attractive new tier of storage that fits
between DRAM memory and hard drives. Solid-state drives are finding growing usage in enterprise storage systems
and servers in applications that demand the highest IO performance.
The non-volatile memory in use today for solid-state drives is NAND flash technology. While Single Level Cell
Flash provides the highest endurance and performance, the optimal balance of price and performance is usually ach-
ieved through the use of Multi-Level Cell Flash. Multiple NAND Flash die are used on a single PCBA and connected
in parallel through a controller to the host bus. Various performance classes of solid-state drives are created by varying
the number of parallel NAND channels and the speed of controller logic and firmware. The controller contains hard-
ware logic and firmware to buffer the data flow to and from the host, to the NAND Flash, and to manage the reli-
ability and performance of the NAND Flash media.
The typical host interfaces for SSDs include PCIe, SAS and SATA. PCIe products typically offer the highest per-
formance and come on edge cards that plug into the PCIe bus. PCIe defines the hardware and electrical interface but
the software protocols are still proprietary today. New standards such as NVMe and SCSI express are emerging to
bring more standardized software protocols for communicating with PCIe solid-state drives. SAS and SATA products
utilize standardized interfaces similar to hard drives and come in 2.5-inch form factors with differing package heights
depending on the application and usage. The typical power consumption for the SAS and SATA interfaces is similar to
hard drives, while the power consumption of PCIe form factor devices is typically higher.
Our products generally leverage a common platform for various products within product families, and in some
cases across product families, resulting in the commonality of components which reduces our exposure to changes in
demand, facilitates inventory management and allows us to achieve lower costs through purchasing economies. This
platform strategy also enables our customers to leverage their qualification efforts onto successive product models. For
a discussion of associated risks, see Item 1A of this Annual Report on Form 10-K.
Research and Development
We devote substantial resources to the development of new products and the improvement of existing products.
We focus our engineering efforts on coordinating our product design and manufacturing processes to bring our prod-
ucts to market in a cost-effective and timely manner. Research and development expenses totaled $1.7 billion, $1.6
billion and $1.1 billion in 2014, 2013 and 2012, respectively. For a discussion of associated risks, see Item 1A of this
Annual Report on Form 10-K.
Patents, Licenses and Proprietary Information
We have more than 7,000 active patents and have many patent applications in process. We believe that although
our active patents and patent applications have considerable value, the successful manufacturing and marketing of our
products depends primarily upon the technical and managerial competence of our staff. Accordingly, the patents held
and applied for do not ensure our future success.
In addition to patent protection of certain intellectual property rights, we consider elements of our product
designs and processes to be proprietary and confidential. We believe that our non-patented intellectual property, par-
ticularly some of our process technology, is an important factor in our success. We rely upon non-disclosure agree-
ments and contractual provisions and a system of internal safeguards to protect our proprietary information. Despite
these safeguards, there is a risk that competitors may obtain and use such information. The laws of foreign juris-
dictions in which we conduct business may provide less protection for confidential information than the U.S.
We rely on certain technology that we license from other parties to manufacture and sell our products. We
believe that we have adequate cross-licenses and other agreements in place in addition to our own intellectual property
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