Western Digital (WDC) 10-K risk factor changes: FY2022 vs FY2021

The risks discussed below are not the only ones facing our [removed: business,] [added: business] but represent risks that we believe are material to us.

The COVID-19 pandemic has impacted and [removed: will] [added: may] continue to impact our workforce and operations, and those of our strategic partners, customers, suppliers and logistics providers.

These impacts [removed: have included and may continue to] include under-absorbed overhead, increased [removed: logistics] [added: logistics, component] and other costs, decreased demand for our products and manufacturing challenges.

While our manufacturing facilities and those used by Flash Ventures are all currently operational, [removed: this is subject to change based on evolving conditions] [added: we have experienced and may experience in the future temporary closures of certain manufacturing facilities] related to the pandemic.

The effects of [added: such health crises, including] the [removed: pandemic] [added: COVID-19 pandemic,] are uncertain and difficult to predict, but may include:

- [removed: Further disruptions] [added: Disruptions] to our supply chain, our operations or those of our strategic partners, customers or suppliers caused by employees or others contracting [removed: COVID-19,] [added: infectious diseases,] or governmental orders to contain the spread of [removed: COVID-19] [added: infectious disease,] such as travel restrictions, quarantines, shelter in place orders, trade controls and business shut-downs;

- Extreme volatility in financial [removed: markets] [added: markets,] which may harm our ability to access the financial markets on acceptable terms;

- Increased data security and technology risk as [removed: many] [added: some] employees continue to work from home, including possible outages to systems and technologies critical to remote work and increased data privacy risk with cybercriminals attempting to take advantage of the disruption; and

- Reduced productivity or other disruptions of our operations if [removed: essential] workers in our factories or [removed: those returning to] our [added: other] worksites are exposed to or spread [removed: COVID-19] [added: infectious diseases] to other employees.

Adverse changes in global or regional economic conditions, including, but not limited to, volatility in the financial markets, tighter credit, [added: recession, inflation, rising interest rates,] slower growth in certain geographic regions, political uncertainty, [added: geopolitical tensions or conflicts,] other macroeconomic factors, changes to social conditions and regulations, could significantly harm demand for our products, increase credit and collectability risks, result in revenue reductions, reduce profitability as a result of underutilization of our assets, cause us to change our business practices, increase manufacturing and operating costs or result in impairment charges or other expenses.

Trade restrictions, including tariffs, quotas and embargoes, demand from other [removed: high volume] [added: high-volume] industries for materials or components used in our products, disruptions in supplier relationships or shortages in other components and materials used in our customers’ products could result in increased costs to us or decreased demand for our products, which could negatively impact our business.

[removed: Delays] [added: Delays, shortages] or cost increases experienced by our suppliers in developing or sourcing materials and components for use in our products or incompatibility or quality issues relating to our products, could also harm our business.

We conduct our operations at large, [removed: high volume,] [added: high-volume,] purpose-built facilities in California and throughout Asia.

[removed: A fire,] [added: If a fire (including a climate change-related fire),] flood, earthquake, tsunami or other natural disaster, condition or event such as a power outage, [added: contamination event,] terrorist attack, [added: cybersecurity incident,] physical security breach, political instability, civil unrest, localized labor unrest or other employment issues, or a health epidemic [removed: that] negatively affects any of these [removed: facilities] [added: facilities, it] would significantly affect our ability to manufacture or sell our products and source components and harm our business.

Possible impacts include work and equipment stoppages and [added: damage to or closure of our]

[removed: damage to or closure of our] facilities, or those of our suppliers or customers, for an indefinite period of time.

Climate change has in the [removed: past,] [added: past] and is expected to continue to increase the incidence and severity of certain natural disasters.

Global competition for skilled employees in the technology industry is intense, and our business success becomes increasingly dependent on our ability to retain our key staff and skilled employees, to implement succession plans for our key management and staff, to attract, integrate and retain new skilled [removed: employees, including employees from acquisitions, and to make decisions to realign our business to take advantage of efficiencies or reduce redundancies.][added: employees.]

Changes in immigration policies may [added: also] impair our ability to recruit and hire technical and professional talent.

We experience cyber attacks of varying degrees on our technology infrastructure and systems and, as a result, unauthorized parties have obtained in the past, and may [added: obtain] in the [removed: future obtain,] [added: future,] access to our computer systems and networks, including cloud-based platforms.

The technology infrastructure and systems of [added: some of] our suppliers, vendors, service providers, cloud solution providers and partners have in the past [removed: experienced] [added: experienced,] and may in the future [removed: experience] [added: experience,] such attacks.

Cyber attacks can include ransomware, computer denial-of-service attacks, worms, and other malicious software programs or other attacks, [added: and] covert introduction of malware to computers and networks, including those using techniques that change frequently or may be disguised or difficult to detect, or designed to remain dormant until a triggering event or that may continue undetected for an extended period of [removed: time, impersonation of authorized users, and efforts to discover and exploit any design flaws, bugs, security vulnerabilities or security weaknesses, as well as intentional or unintentional acts by employees or other insiders with access privileges, intentional acts of vandalism or fraud by third parties and sabotage.][added: time.]

[removed: Further, our products contain sophisticated] hardware and operating system software and applications that may contain security problems, security vulnerabilities, or defects in design or manufacture, including “bugs” and other problems that could interfere with the intended operation of our products.

To the extent our products are hacked or the encryption schemes are compromised or breached, this could harm our business by [added: requiring us to employ additional resources to fix the errors or defects, exposing us to litigation and indemnification claims and hurting our reputation.]

We have entered into [added: and expect to continue to enter into] strategic relationships with various partners for product development, [added: manufacturing,] sales growth and the supply of technologies, components, equipment and materials for use in our product design and manufacturing, including our business ventures with Kioxia.

[added: If our supply is limited, we might make strategic decisions] with respect to the allocation of our supply among our products and customers, which could result in less favorable gross margins or damage customer relationships.

Misalignment could arise due to changes in Kioxia’s strategic priorities, management, ownership and/or access to capital, which [removed: has] [added: have] changed in recent years and could continue to change.

Kioxia’s stakeholders may include, or have included in the past, competitors, customers, a private equity firm, government entities and/or public [removed: shareholders.][added: stockholders.]

[removed: Availability] [added: Continued availability] of lease financings for Flash Ventures [added: is not guaranteed and] could [removed: also] be limited by [added: several factors, including] our and/or Kioxia’s financial [removed: performance.][added: performance and changes to our and/or Kioxia’s business, ownership or corporate structure.]

- we may lose the rights [added: to, or ability] to [added: independently manufacture, certain] technology or products being developed or manufactured by strategic partners, including if any of them is acquired by another company, files for bankruptcy or experiences financial or other losses;

We participate in a highly competitive industry that is subject to declining [removed: ASPs,] [added: average selling prices (“ASPs”),] volatile demand, rapid technological change and industry consolidation, as well as lengthy product qualifications, all of which could negatively impact our business.

Finally, the data storage industry has experienced consolidation over the past several years, [added: which could enhance the resources and lower the cost structure of some competitors.]

- our ability to cost effectively respond to customer requests for new products or features [added: (including requests for more efficient] and [added: efficiently-produced products with reduced environmental impacts) and] software associated with our products;

[removed: In order to pursue this part of our growth strategy successfully, we must] continue to identify attractive acquisition or investment opportunities, successfully complete the transactions, some of which may be large and complex, and manage post-closing issues such as integration of the acquired company or [removed: employees.][added: employees and integration of processes and systems.]

There [added: have been and] may [added: continue to] be difficulties with implementing new systems and processes or with integrating systems and processes of companies with complex operations, which [removed: could] [added: can] result in inconsistencies in standards, controls, procedures and policies and may increase the risk that our internal controls are found to be ineffective.

Acquisitions and investments may also result in the issuance of equity securities that may be dilutive to our [removed: shareholders] [added: stockholders] as well as earn-out or other contingent consideration payments and the issuance of additional indebtedness that would put additional pressure on liquidity.

These actions could also impact employee [added: retention.]

These events [removed: would likely harm] [added: have impacted, and may in the future impact,] our operating results and financial condition.

Our [removed: substantial] level of debt may negatively impact our liquidity, restrict our operations and ability to respond to business opportunities, and increase our vulnerability to adverse economic and industry conditions.

We [removed: have a substantial amount of] [added: utilize] debt [added: financing in our capital structure] and may incur additional debt, including under our revolving credit facility, subject to customary conditions in our [removed: credit] [added: loan] agreement.

Public health crises, including the COVID-19 pandemic, have had, and could in the future have, a negative effect on our business.

Future outbreaks of infectious disease or other public health crises may have a similar impact.

The degree to which the COVID-19 pandemic or future public health crises ultimately impact our business will depend on many factors beyond our control, which are highly uncertain and cannot be predicted at this time.

Our suppliers have in the past been, and may in the future be, unable or unwilling to meet our requirements, including as a result of events outside of their control such as trade restrictions (including tariffs, quotas and embargoes), geopolitical conflicts, public health emergencies, or natural disasters.

Climate change may reduce the availability and/or increase the cost of certain types of insurance by contributing to an increase in the incidence and severity of certain natural disasters.

Additionally, uncertainty about the structure and organization of our business as a result of our ongoing strategic review could negatively impact our ability to recruit and retain key staff and skilled employees.

Cyber attacks may also include impersonation of authorized users, efforts to discover and exploit any design flaws, bugs, security vulnerabilities or security weaknesses, intentional or unintentional acts by employees or other insiders with access privileges, intentional acts of vandalism or fraud by third parties and sabotage.

Geopolitical tensions or conflicts may create heightened risk of cyber attacks.

Further, our products contain sophisticated

Our review of potential strategic alternatives may not result in an executed or consummated transaction or other strategic alternative, and the process of reviewing strategic alternatives or its conclusion could adversely affect our business and our stockholders.

In June 2022, we announced that we are reviewing potential strategic alternatives aimed at further optimizing long-term value for our stockholders.

The potential strategic alternatives include, among other things, the option to separate our Flash and HDD business units.

In conjunction with that review process, the Company announced that it had entered into a letter agreement with Elliott Investment Management L.P. (“Elliott”), which had disclosed in May 2022 a $1 billion investment in our Company and called for a full strategic review of our business.

We are actively working with financial advisors and the Company’s legal counsel in this strategic review process.

Any potential transaction or other strategic alternative would be dependent on a number of factors that may be beyond our control, including, among other things, market conditions, industry trends, regulatory approvals, and the availability of financing for a potential transaction on reasonable terms.

The process of reviewing potential strategic alternatives may be time consuming, distracting and disruptive to our business operations, which may cause concern to our current or potential customers, employees, investors, strategic partners and other constituencies and may have a material impact on our business and operating results and/or result in increased volatility in our share price.

We have and will continue to incur substantial

expenses associated with identifying, evaluating and negotiating potential strategic alternatives.

There can be no assurance that any potential transaction or other strategic alternative, if consummated, will provide greater value to our stockholders than that reflected in the current price of our common stock.

Until the review process is concluded, perceived uncertainties related to our future may result in the loss of potential business opportunities and volatility in the market price of our common stock and may make it more difficult for us to attract and retain qualified personnel and business partners.

Similarly, other activist investors may engage in proxy solicitations or advance shareholder proposals, or otherwise attempt to affect changes and assert influence on our Board and management, which could lead to the impacts on our business, board, management and employees discussed above.

We may also have difficulty effectively competing with manufacturers benefiting from governmental investments and may be subject to increased complexity and reduced efficiency in our supply chain as a result of governmental efforts to promote domestic semiconductor industries in various jurisdictions.

In order to pursue this part of our growth strategy successfully, we must

Our ratings reflect the opinions of the ratings agencies as to our

Beginning in our fiscal year 2023, the Tax Cuts and Jobs Act of 2017 eliminates the option to deduct research and development expenditures in the year incurred, requiring amortization in accordance with IRC Section 174.

If this requirement is not repealed or otherwise modified, it will materially increase our effective tax rate and reduce our operating cash flows.

rates, most notably the strengthening of the U.S. dollar against other foreign currencies, contribute to variations in sales of products in impacted jurisdictions and could negatively impact demand and revenue growth.

The COVID-19 pandemic could negatively affect our business.

- A global economic downturn or a recession causing a decrease or shift in short- or long-term demand for our products, resulting in industry oversupply and decreases of average selling prices (“ASPs”);

The degree to which the pandemic ultimately impacts our business will depend on future developments beyond our control which are highly uncertain and cannot be predicted at this time, including the severity and duration of the pandemic, the extent of actions to contain or treat COVID-19, the timing, distribution, efficacy and public acceptance of vaccines around the world, any possible resurgence of COVID-19, including the emergence of more contagious or vaccine-resistant variants and how quickly and to what extent normal economic and operating activity can resume.

- copyright levies or similar fees or taxes imposed in European and other countries;

Our suppliers have in the past been, and may in the future be, unable or unwilling to meet our requirements.

requiring us to employ additional resources to fix the errors or defects, exposing us to litigation and indemnification claims and hurting our reputation.

If our supply is limited, we might make strategic decisions

which could enhance the resources and lower the cost structure of some competitors.

We may also have difficulty effectively competing with manufacturers benefiting from governmental investments.

retention.

Further, if we are unable to repay, refinance or restructure our secured indebtedness, the holder of such debt could proceed against the collateral securing that indebtedness.

Our credit agreement uses the London Interbank Offered Rate (“LIBOR”) as a reference rate for our term loans and revolving credit facility, such that the applicable interest rate may, at our option, be calculated based on LIBOR.

In July 2017, the U.K.’s Financial Conduct Authority, which regulates LIBOR, announced that it intends to phase out LIBOR beginning at the end of 2021, and LIBOR remains subject to ongoing national, international and other regulatory guidance and proposals for reform.

As a result, LIBOR may perform differently than in the past and may ultimately cease to be utilized or to exist, either during or after 2021.

Alternative benchmark rates may replace LIBOR, and we cannot predict how markets will respond to these proposed alternative benchmark rates or the effect of any changes to LIBOR or the discontinuation of LIBOR.

If LIBOR is no longer available or if our lenders have increased costs due to changes in LIBOR, we may experience potential increases in interest rates on our variable rate debt, which could negatively impact our interest expense, results of operations and cash flows.

In addition, replacing LIBOR with an alternative reference rate for any of our debt could be a taxable event.

If a cancellation event

Further, the ability to enter into foreign exchange contracts with

[removed: We] [added: With dedicated business units driving advancements in NAND flash and magnetic recording technologies, we create and] drive [removed: the innovation] [added: innovations] needed to help customers capture, preserve, [removed: access] [added: access,] and transform an ever-increasing diversity of data.

Fiscal years [removed: 2021] [added: 2022] and [removed: 2019,] [added: 2021,] which ended on July [removed: 2, 2021] [added: 1, 2022] and [removed: June 28, 2019,] [added: July 2, 2021,] respectively, are comprised of 52 weeks, with all quarters presented consisting of 13 weeks.

*Business [removed: Structure*][added: Structure and Strategic Alternatives*]

[removed: Late in the first quarter of fiscal] [added: In] 2021, we [added: made and] announced [removed: a] [added: the] decision to reorganize our business by forming two separate product business units: [removed: flash-based products] [added: Flash] and [removed: hard disk drives (“HDD”).][added: HDD.]

[removed: In the second fiscal quarter, to] [added: To] align with the new operating model and business structure, we [removed: began making] [added: made] management organizational changes and [removed: are implementing] [added: implemented] new reporting modules and processes to provide discrete information to manage the business.

[removed: We] [added: As the ongoing COVID-19 pandemic has evolved, we] have implemented and maintained more thorough sanitation practices as outlined by health organizations and supported vaccination efforts.

[removed: As we begin to phase in a return to site for more employees, we are monitoring] [added: We continually monitor] and [removed: adopting] [added: update our] practices [removed: recommended by] [added: based on recommendations from] health organizations to ensure the continued safety of our employees and business partners.

In addition, the responses to COVID-19 taken by others in the supply chain have [removed: increased] [added: contributed to] the [added: increases in the] costs of their [removed: services] [added: services,] which have in turn impacted our operations.

[removed: As a result, we have] [added: We] incurred [added: incremental] charges [removed: of approximately $127 million] primarily related to [removed: higher logistics] [added: logistics, absorption, and other factory-related costs of approximately $248 million and $127 million,] during [removed: the year ended July 2,] [added: 2022 and] 2021, [added: respectively,] which were recorded in [removed: cost] [added: Cost] of revenue.

We will continue to actively monitor [removed: the situation] [added: these situations] and may take further actions altering our business operations that we determine are in the best interests of our employees, customers, partners, suppliers, and stakeholders, or as required by federal, state, or local authorities.

See [removed: “The COVID-19 pandemic could negatively affect our business” in] Part I, Item 1A, *Risk Factors*, of this Annual Report on Form 10-K for more information regarding the risks we face as a result of the COVID-19 [removed: pandemic.][added: pandemic, supply chain disruptions and current macroeconomic conditions.]

*Summary Comparison of [removed: 2021, 2020] [added: 2022, 2021] and [removed: 2019*][added: 2020*]

| | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: 2021] [added: 2022] | | | | | | | | | | | | [removed: 2020] [added: 2021] | | | | | | | | | | | | | | | | | | [removed: 2019] [added: 2020] | | | | | | | | | | | | | | | | | | | | |

| Revenue, net | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | $ | [removed: 16,922] [added: 18,793] | | | | | 100.0 | | % | | | | $ | [removed: 16,736] [added: 16,922] | | | | | 100.0 | | % | | | | | | | | | | $ | [removed: 16,569] [added: 16,736] | | | | | 100.0 | | % |

| Cost of revenue | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: 12,401] [added: 12,919] | | | | | | [removed: 73.3] [added: 68.7] | | | | | | [removed: 12,955] [added: 12,401] | | | | | | [removed: 77.4] [added: 73.3] | | | | | | | | | | | | [removed: 12,817] [added: 12,955] | | | | | | 77.4 | | |

| Gross profit | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: 4,521] [added: 5,874] | | | | | | [removed: 26.7] [added: 31.3] | | | | | | [removed: 3,781] [added: 4,521] | | | | | | [removed: 22.6] [added: 26.7] | | | | | | | | | | | | [removed: 3,752] [added: 3,781] | | | | | | 22.6 | | |

| Research and development | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: 2,243] [added: 2,323] | | | | | | [removed: 13.3] [added: 12.4] | | | | | | [removed: 2,261] [added: 2,243] | | | | | | [removed: 13.5] [added: 13.3] | | | | | | | | | | | | [removed: 2,182] [added: 2,261] | | | | | | [removed: 13.2] [added: 13.5] | | |

| Selling, general and administrative | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: 1,105] [added: 1,117] | | | | | | [removed: 6.5] [added: 5.9] | | | | | | [removed: 1,153] [added: 1,105] | | | | | | [removed: 6.9] [added: 6.5] | | | | | | | | | | | | [removed: 1,317] [added: 1,153] | | | | | | [removed: 7.9] [added: 6.9] | | |

| Employee termination, asset impairment, and other charges | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: (47)] [added: 43] | | | | | | [removed: (0.3)] [added: 0.2] | | | | | | [removed: 32] [added: (47)] | | | | | | [removed: 0.2] [added: (0.3)] | | | | | | | | | | | | [removed: 166] [added: 32] | | | | | | [removed: 1.0] [added: 0.2] | | |

| Total operating expenses | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: 3,301] [added: 3,483] | | | | | | [removed: 19.5] [added: 18.5] | | | | | | [removed: 3,446] [added: 3,301] | | | | | | [removed: 20.6] [added: 19.5] | | | | | | | | | | | | [removed: 3,665] [added: 3,446] | | | | | | [removed: 22.1] [added: 20.6] | | |

| Operating income | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: 1,220] [added: 2,391] | | | | | | [removed: 7.2] [added: 12.7] | | | | | | [removed: 335] [added: 1,220] | | | | | | [removed: 2.0] [added: 7.2] | | | | | | | | | | | | [removed: 87] [added: 335] | | | | | | [removed: 0.5] [added: 2.0] | | |

| Interest income | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: 7] [added: 6] | | | | | | — | | | | | | [removed: 28] [added: 7] | | | | | | [removed: 0.2] [added: —] | | | | | | | | | | | | [removed: 57] [added: 28] | | | | | | [removed: 0.3] [added: 0.2] | | |

| Interest expense | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: (326)] [added: (304)] | | | | | | [removed: (1.9)] [added: (1.6)] | | | | | | [removed: (413)] [added: (326)] | | | | | | [removed: (2.5)] [added: (1.9)] | | | | | | | | | | | | [removed: (469)] [added: (413)] | | | | | | [removed: (2.8)] [added: (2.5)] | | |

| Other income, net | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: 26] [added: 30] | | | | | | 0.2 | | | | | | [removed: 4] [added: 26] | | | | | | [removed: —] [added: 0.2] | | | | | | | | | | | | [removed: 38] [added: 4] | | | | | | [removed: 0.2] [added: —] | | |

| Total interest and other expense, net | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: (293)] [added: (268)] | | | | | | [removed: (1.7)] [added: (1.4)] | | | | | | [removed: (381)] [added: (293)] | | | | | | [removed: (2.3)] [added: (1.7)] | | | | | | | | | | | | [removed: (374)] [added: (381)] | | | | | | (2.3) | | |

| Income (loss) before taxes | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: 927] [added: 2,123] | | | | | | [removed: 5.5] [added: 11.3] | | | | | | [removed: (46)] [added: 927] | | | | | | [removed: (0.3)] [added: 5.5] | | | | | | | | | | | | [removed: (287)] [added: (46)] | | | | | | [removed: (1.7)] [added: (0.3)] | | |

| Income tax expense | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: 106] [added: 623] | | | | | | [removed: 0.6] [added: 3.3] | | | | | | [removed: 204] [added: 106] | | | | | | [removed: 1.2] [added: 0.6] | | | | | | | | | | | | [removed: 467] [added: 204] | | | | | | [removed: 2.8] [added: 1.2] | | |

| Net income (loss) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | $ | [removed: 821] [added: 1,500] | | | | | [removed: 4.9] [added: 8.0] | | % | | | | $ | [removed: (250)] [added: 821] | | | | | [removed: (1.5)] [added: 4.9] | | % | | | | | | | | | | $ | [removed: (754)] [added: (250)] | | | | | [removed: (4.6)] [added: (1.5)] | | % |

The following table sets forth, for the periods presented, summary information regarding our [added: disaggregated] revenue:

| | | | [removed: | | | | | |] [added: 2022] | | | | | | 2021 | | | | | | 2020 | | | [removed: | | | 2019 | | |]

| HDD | | | [removed: | | | | | | |] [added: 9,040] | | | | | [removed: $] | 8,216 | | | | | [removed: $] | 8,967 | | | [removed: | | $ | 8,746 | |]

| [removed: Flash-based | | | | |] [added: Flash] | | | [added: $] | [added: 9,753] | | | | | [added: $] | 8,706 | | | | | [added: $] | 7,769 | | [removed: | | | | 7,823 | | |]

| Total Revenue | | | | | | | | | | | | | | | $ | [removed: 16,922] [added: 18,793] | | | | | $ | [removed: 16,736] [added: 16,922] | | | | | $ | [removed: 16,569] [added: 16,736] | |

| Americas | | | | | | | | | | | | | | | [removed: $] [added: 5,867] | [removed: 4,406] | | | | | [removed: $] [added: 4,406] | [removed: 5,444] | | | | | [removed: $] [added: 5,444] | [removed: 4,361] | |

| Europe, Middle East and Africa | | | | | | | | | | | | | | | [removed: 3,061] [added: 2,872] | | | | | | [removed: 2,926] [added: 3,061] | | | | | | [removed: 3,109] [added: 2,926] | | |

| Asia | | | | | | | | | | | | | | | [removed: 9,455] [added: $] | [added: 10,054] | | | | | [removed: 8,366] [added: $] | [added: 9,455] | | | | | [removed: 9,099] [added: $] | [added: 8,366] | |

| Exabytes Shipped | | | | | | | | | | | | | | | [removed: 541] [added: 645] | | | | | | [removed: 518] [added: 541] | | | | | | [removed: 383] [added: 518] | | |

For [removed: 2021, 2020] [added: 2022, 2021] and [removed: 2019,] [added: 2020,] our top 10 customers accounted for [removed: 39%, 42% and] 45%, [added: 39% and 42%,] respectively, of our net revenue.

For each of [removed: 2021, 2020] [added: 2022, 2021] and [removed: 2019,] [added: 2020,] no single customer accounted for 10% or more of our net revenue.

For [removed: 2021, 2020] [added: 2022, 2021] and [removed: 2019,] [added: 2020,] these programs represented [removed: 19%, 16%] [added: 17%, 19%] and [removed: 15%,] [added: 16%,] respectively, of gross revenues, and adjustments to revenue due to changes in accruals for these programs have generally averaged less than 1% of gross revenue over the last three [removed: fiscal] years.

We are on a mission to unlock the potential of data by harnessing the possibility to use it.

We are a leading developer, manufacturer, and provider of data storage devices based on both flash-based products (“Flash”) and hard disk drives (“HDD”) technologies.

Our broad portfolio of technology and products address multiple end markets.

In 2022, we refined the end markets we report to be “Cloud”, “Client” and “Consumer”.

Cloud represents a large and growing end market comprised primarily of products for public or private cloud environments and enterprise customers, which we believe we are uniquely positioned to address as the only provider of both Flash and HDD.

Through the Client end market, we provide our original equipment manufacturer (“OEM”) and channel customers a broad array of high-performance flash and hard drive solutions across personal computer, mobile, gaming, automotive, virtual reality headsets, at-home entertainment, and industrial spaces.

The Consumer end market is highlighted by our broad range of retail and other end-user products, which capitalize on the strength of our product brand recognition and vast points of presence around the world.

Effective July 3, 2021, management finalized its assessment of our operating segments and concluded that we now have two reportable segments: Flash and HDD.

In June 2022, we announced that we are reviewing potential strategic alternatives aimed at further optimizing long-term value for stockholders.

The Executive Committee of our Board of Directors is overseeing the assessment process and evaluating a range of alternatives, including options for separating our Flash and HDD business units.

In conjunction with that review process, we announced that we had entered into a letter agreement with Elliott Investment Management L.P. (“Elliott”), which had disclosed in May 2022 a $1 billion investment in our Company and called for a full strategic review of our business.

We are actively working with financial advisors and our legal counsel in this strategic review process.

*Tax Resolution*

As previously disclosed, we have received statutory notices of deficiency and notices of proposed adjustments from the Internal Revenue Service (“IRS”) with respect to 2008 through 2015.

During 2022, new information became available which required us to re-measure our unrecognized tax benefits for this IRS matter.

We and the IRS tentatively reached a settlement for resolving this matter.

Additional information is provided in our discussion of Income tax expense in our results of operations below, as well as in Part I, Item 1, Note 14, *Income Tax Expense*, of the Notes to the Consolidated Financial Statements, and in the “Short- and Long-Term Liquidity\-Unrecognized Tax Benefits” section below.

*Flash Ventures Contamination Incident*

In February 2022, contamination of certain material used in manufacturing processes occurred at Flash Ventures’ fabrication facilities in both Yokkaichi and Kitakami, Japan which resulted in damage to inventory units in production, a temporary disruption to production operations and a reduction in our flash wafer availability.

During 2022, we incurred charges of $207 million related to this contamination incident that were recorded in cost of revenue and primarily consisted of scrapped inventory and rework costs, decontamination and other costs needed to restore the facilities to normal capacity, and under absorption of overhead costs.

We are evaluating potential options for recovery.

During 2022, we continued to execute on our commitment to reduce our overall debt levels and Fitch Ratings, Inc. raised our Company credit rating to investment grade in December 2021.

We fully repaid our Term Loan B-4 in October 2021 and shortly thereafter initiated a series of transactions to further reduce our debt levels and better stagger the maturities of our debt.

In December 2021, we issued $500 million aggregate principal amount of 2.850% senior unsecured notes due February 1, 2029 (the “2029 Notes”) and we issued $500 million aggregate principal amount of 3.100% senior unsecured notes due February 1, 2032 (the “2032 Notes”).

We used the proceeds from these note offerings and available cash to voluntarily repay $1.21 billion of our Term Loan A-1 and reduce the principal amount to $3.0 billion as of December 31, 2021.

In January 2022, we amended and restated our existing loan agreement to provide for, among other things: (i) the issuance of a new $3.0 billion Term Loan A-2 maturing in January 2027 to replace our previously existing Term Loan A-1; (ii) the availability of a new $2.25 billion revolving credit facility maturing in January 2027 to replace our previously existing $2.25 billion revolving credit facility; and (iii) additional covenant flexibility and other modifications.

As of July 1, 2022, over 80% of the principal amount of our debt is now due in 2026 or later.

We believe this new debt structure gives us greater financial stability and flexibility to manage our business over the longer term.

Additional information regarding our indebtedness, including the principal repayment terms, interest rates, covenants and other key terms of our outstanding indebtedness, is included in Part II, Item 8, Note 8, *Debt,* of the Notes to Consolidated Financial Statements in this Annual Report on Form 10-K.

*New Flash Ventures Fabrication Facility*

In January 2022, we entered into additional agreements regarding Flash Ventures’ investment in a new wafer fabrication facility currently under construction in Yokkaichi, Japan, referred to as “Y7”.

The primary purpose of Y7 is to provide clean room space to continue the transition of existing flash-based wafer capacity to newer flash technology nodes.

The first phase of construction of Y7 is complete and output is expected to commence in the first half of 2023.

We are committed to pay, among other items, future building depreciation prepayments of approximately $268 million in 2023 and $22 million in 2024, to be credited against future wafer charges.

The technology hardware and semiconductor industries faced supply chain disruptions and component shortages during 2022, which negatively impacted both our customers’ ability to ship products and our ability to build products.

In order to meet our end customers’ demand, we are incurring increased component costs, which primarily impacted our hard drive gross margins in 2022.

Additionally, the global economy has recently experienced significant volatility and disruptions impacted by increases in inflation rates, Russia’s invasion of Ukraine and rising fuel prices, rising interest rates, declines in consumer confidence, declines in economic growth, and uncertainty about economic stability.

We are seeing our PC OEM customers aggressively right-size their inventory to reflect current demand conditions, which will impact our business in this market in the second half of the calendar year.

While we ultimately expect that the impact of these conditions will be transitory, the severity and duration of the impact of these conditions on our business is dynamic and cannot be predicted.

We believe we have made significant progress in strengthening our product portfolio to meet our customers’ growing and evolving storage needs.

We are a leading developer, manufacturer and provider of data storage devices and solutions that address the evolving needs of the IT industry and the infrastructure that enables the proliferation of data in virtually every other industry.

We create environments for data to thrive.

Everywhere data lives, from advanced data centers to mobile sensors to personal devices, our industry-leading solutions deliver the possibilities of data.

We are evaluating the impact of these changes on our discussion and analysis of our financial condition and results of operations and expect to modify our disclosures to align with this structure when the implementations and assessments are completed, which is expected to be in the first quarter of fiscal 2022.

As a result of the ongoing COVID-19 pandemic, governments and other authorities around the world, including federal, state and local authorities in the United States, have from time-to-time imposed measures intended to reduce its spread, including restrictions on freedom of movement and business operations such as travel bans, border closings, business limitations and closures (subject to exceptions for essential operations and businesses), quarantines and shelter-in-place orders.

Although some of these governmental restrictions have since been lifted or scaled back, a resurgence of COVID-19 infections could result in the re-imposition of certain restrictions in efforts to reduce further spread of COVID-19.

We have taken actions to protect the health and safety of our employees while continuing to serve our global customers as an essential business.

As an essential business, we continue to provide products and solutions that enable the proliferation of data and facilitate the sharing of information remotely, which has become more critical as much of the world is interacting from areas of self-isolation.

Generally, our revenues have remained solid during the pandemic, supported by continued work-from-home, distance learning, and at-home entertainment demand.

However, the COVID-19 environment remains dynamic and we cannot predict the duration of the pandemic and how demand may change as it continues to develop.

| | | | | | | | | | Year Ended | | | | | | | | | | | | | | | | | | | | |

| Revenue by Product | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Client Devices | | | | | | | | | | | | | | | $ | 8,255 | | | | | $ | 7,160 | | | | | $ | 8,095 | |

| Data Center Devices & Solutions | | | | | | | | | | | | | | | 4,950 | | | | | | 6,228 | | | | | | 5,038 | | |

| Client Solutions | | | | | | | | | | | | | | | 3,717 | | | | | | 3,348 | | | | | | 3,436 | | |

Net revenue increased 1% in 2021 compared to 2020, which reflects approximately 13 percentage points increase in revenue related to higher exabyte volume of flash sold, largely offset by lower average selling price per gigabyte.

Client Devices revenue increased 15% year over year, reflecting a 22% increase from a higher volume of flash products sold.

This increase in flash volume was driven by continued strength in demand for notebook and Chromebooks, gaming, smart home devices, automotive and industrial applications.

This increase was partially offset by lower average selling price per gigabyte, primarily in flash.

Data Center Devices and Solutions revenue decreased 20% year over year.

Lower exabytes of storage sold for HDD and flash each contributed approximately 7 percentage points to the revenue decline, while lower average selling price per gigabyte, primarily in HDD products, contributed another 6 percentage points to the decline.

Year-over-year volume was negatively impacted by cloud digestion and China shipment restrictions, and delays in product qualifications with certain customers earlier in the year.

The impacts of cloud digestion have abated and we have now completed qualifications with all our cloud titan customers.

In flash, we are beginning to see growth with our second generation, NVMe enterprise SSD at several cloud titans and are ramping production more broadly.

In HDD, we are experiencing a resurgence of demand driven by the successful ramp of our 18-terabyte energy-assisted hard drive, growing cloud demand, a recovery in enterprise spending, and to a lesser extent, cryptocurrency, driven by Chia.

We believe the strong demand from our cloud customers and beginning of a recovery in the enterprise demand continues to positively impact results.

Client Solutions revenue increased 11% year over year, which reflects an increase of approximately 16 percentage points due to exabyte growth, split evenly between HDD and Flash products, which was partially offset by lower average selling price per gigabyte.

Client Solutions remains a high performing end market, reflecting our brand recognition, broad product portfolio and extensive distribution channels to markets.

The changes in net revenue by geography reflect an increase in Asia due to our increased sales of mobility products to manufacturers in the Asia region, and a decrease in Americas driven by lower sales of capacity enterprise products.

Gross profit increased $740 million, or 19.6%, in 2021 compared to 2020, which reflected a $279 million decrease in charges for amortization expense on acquired intangible assets, $143 million improvement related to power outage charges of $68 million incurred in 2020 combined with a $75 million recovery in the current year as well as incremental profit from the increase in volume.

As a percent of revenue, gross margin increased by 4.1 percentage points over the prior year of which 2.5 percentage points reflected the impact of the change in power outage charges and lower charges for amortization expense.

In addition, as we ramped production on new products, cost reduction also contributed to the increase in gross margin.

Research and development (“R&D”) expense decreased $18 million in 2021 compared to 2020.

The decrease was driven by lower facility costs of approximately $50 million due to restructuring and cost initiatives and approximately $20 million of lower travel related expenses due to COVID-19 restrictions, partially offset by higher employee compensation cost for additional headcount as we invested in research and development, and higher variable compensation cost due to improved earnings.

Selling, general and administrative (“SG&A”) expense decreased $48 million in 2021 compared to 2020.

The decline was primarily driven by a $50 million reduction in expenses related to travel, marketing and outside services as a result of COVID-19 restrictions.

In addition, the effective tax rate for 2020 includes the discrete effect of a de-recognition of $31 million for certain deferred tax assets associated with creditable foreign withholding taxes due to the issuance of final regulatory guidance.

The regulatory guidance does not preclude us from potentially claiming these creditable taxes as a period benefit when paid.

DIO increased by 11 days over the prior year, reflecting higher stocking levels of HDD inventory to serve anticipated demand growth and better output from Flash Ventures as production ramped up at the new fabrication sites.

Net cash provided by investing activities in 2020 primarily consisted of a $931 million net decrease in notes receivable issuances to Flash Ventures, partially offset by $647 million of capital expenditures.

For additional information, see Part II, Item 8, Note [removed: 5,] [added: 6,] *Fair Value Measurements and Investments,* and Note [removed: 6,] [added: 7,] *Derivative Instruments and Hedging Activities*, of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K.

Therefore, we have performed sensitivity analyses for [removed: 2021] [added: 2022] and [removed: 2020,] [added: 2021,] using a modeling technique that measures the change in the fair values arising from a hypothetical 10% adverse movement in the levels of foreign currency exchange rates relative to the U.S. dollar, with all other variables held constant.

The foreign currency exchange rates used in performing the sensitivity analyses were based on market rates in effect at July [removed: 2, 2021] [added: 1, 2022] and July [removed: 3, 2020.][added: 2, 2021.]

The sensitivity analyses indicated that a hypothetical 10% adverse movement in foreign currency exchange rates relative to the U.S. dollar would result in a foreign exchange fair value loss of [removed: $183] [added: $306] million and [removed: $135] [added: $183] million at July [removed: 2, 2021] [added: 1, 2022] and July [removed: 3, 2020,] [added: 2, 2021,] respectively.

During [removed: 2021, 2020] [added: 2022, 2021] and [removed: 2019,] [added: 2020,] total net realized and unrealized transaction and foreign exchange contract currency gains and losses were not material to our Consolidated Financial Statements.

[removed: To balance the portfolio and moderate our exposure to fluctuations in interest rates underlying our variable debt, we entered into] [added: We currently have] pay-fixed interest rate swaps [removed: on $2.00] [added: of $2.0] billion notional amount, which [removed: effectively converts a portion] [added: would mitigate the impact] of [removed: our term loan to fixed] [added: fluctuations in variable interest] rates [added: noted above] through February 2023.

For additional information regarding our variable interest rate debt, see Part II, Item 8, Note [removed: 7,] [added: 8,] *Debt*, of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K.

As of July 1, 2022, we had reduced the amount of variable rate debt to $2.70 billion from $5.43 billion as of July 2, 2021.

As of July 2, 2022, our only variable rate debt outstanding was our Term Loan A-2 Loan, which bears interest, at the Company’s option, at a per annum rate equal to either (x) the Adjusted Term Secured Overnight Financing Rate (“SOFR”) (as defined in the Loan Agreement) plus an applicable margin varying from 1.125% to 2.000% or (y) a base rate plus an applicable margin varying from 0.125% to 1.000%, in each case depending on the corporate family ratings of the Company from at least two of Standard & Poor’s Ratings Services, Moody’s Investors Service, Inc. and Fitch Ratings, Inc., with an initial interest rate of Adjusted Term SOFR plus 1.375%.

As of July 1, 2022, a one percent increase in the variable rate of interest would increase annual interest expense by $27 million.

Borrowings under our revolving credit facility and our term loan A-1 due 2023 bear interest at a rate per annum, at our option, of either an adjusted LIBOR (subject to a 0.0% floor) plus an applicable margin varying from 1.125% to 2.000% or a base rate plus an applicable margin varying from 0.125% to 1.000%, in each case depending on our corporate credit ratings.

As of July 2, 2021, the applicable margin based on our current credit ratings was 1.5%.

Borrowings under our term loan B-4 due 2023 bear interest at a rate per annum, at our option, of either an adjusted LIBOR (subject to a 0.0% floor) plus a margin of 1.75% or a base rate plus a margin of 0.75%.

As of July 2, 2021, we had $5.43 billion of variable rate debt, representing 61% of the par value of our debt.

After giving effect to the $2.00 billion of interest rate swaps, we effectively had $3.43 billion of Long-term debt subject to variations in interest rates and a one percent increase in the variable rate of interest would increase annual interest expense by $34 million.

[removed: We are] [added: With dedicated business units] driving [removed: the innovation] [added: advancements in NAND flash and magnetic recording technologies, we create and drive innovations] needed to help customers capture, preserve, [removed: access] [added: access,] and transform an ever-increasing diversity of data.

We have one of the technology industry’s most valuable patent portfolios with approximately [removed: 13,700] [added: 13,500] active patents worldwide.

The [removed: unabated] [added: strong] growth in amount, value, and use of data continues, creating a global need for [removed: a] larger, faster and more capable storage [removed: infrastructure.][added: solutions.]

We help original equipment manufacturers (“OEM”) address storage opportunities and solutions to capture and transform data in [added: a] myriad [added: of] devices and edge technologies.

We have also built strong consumer brands with tools to manage [removed: fast-accumulating] [added: vast] libraries of personal [removed: content.][added: content and to push the limits of what’s possible for storage.]

[removed: We] [added: At Western Digital, we] continue to transform ourselves to address the growth in data by providing what we believe to be the broadest range of storage technologies in the industry with a comprehensive product portfolio and global reach.

The ability to access, store and share data from anywhere on any device is increasingly important to our [removed: customers.][added: customers and end users.]

Our strengths in innovation and cost leadership, [removed: expansive] [added: diversified] product portfolio and broad routes to market provide a foundation upon which we are solidifying our position as an essential building block of the digital economy.

[removed: There’s] [added: There is] tremendous market opportunity flowing from the rapid global adoption of the technology architecture built with cloud infrastructure tied to intelligent endpoints all connected by high performance networks.

The value and urgency of data storage at every point across this architecture has never been [removed: more clear.][added: clearer.]

The storage industry is increasingly utilizing tiered architectures with [removed: HDDs,] [added: HDD,] solid state drives [removed: (“SSDs”)] [added: (“SSD”)] and other non-volatile memory-based storage to address an expanding set of uses and applications.

We believe our expertise and innovation across both [removed: HDD] [added: Flash] and [removed: flash] [added: HDD] technologies enable us to bring powerful solutions to a broader range of applications.

In [removed: flash,] [added: Flash,] we compete with vertically integrated suppliers such as [removed: Intel Corporation,] Kioxia, Micron Technology, Inc., Samsung Electronics Co., Ltd., SK hynix, Inc., [added: Solidigm,] Yangtze Memory Technologies Co., Ltd. and numerous smaller companies that assemble flash into products.

We believe we are the only company in the world with large-scale capabilities to develop and manufacture a portfolio of integrated data storage solutions that are based on both [removed: HDD] [added: Flash] and [removed: flash memory] [added: HDD] technologies.

We strive to successfully execute our strategy through the following foundational elements in order to [removed: deliver the best outcome] [added: create long-term value] for our customers, partners, investors and employees:

- *Innovation and Cost Leadership:* We continue to innovate and develop advanced technologies across platforms for both [removed: HDD] [added: Flash] and [removed: flash] [added: HDD] to deliver timely new products and solutions to meet growing demands for scale, performance and cost efficiency in the market.

[removed: *•Broad] [added: - *Broad] Product Portfolio:* We leverage our capabilities in firmware, software and systems in both [removed: HDD] [added: Flash] and [removed: flash] [added: HDD] to deliver compelling and differentiated integrated storage solutions to our customers that offer the best combinations of performance, cost, power consumption, form factor, quality and reliability, while creating new use cases for our solutions in emerging markets.

[removed: *•Operational] [added: - *Operational] Excellence:* We are focused on delivering the best value for our customers in [removed: data center,] [added: cloud,] client and consumer [added: end] markets through a relentless focus on appropriately scaling our operations across both [removed: HDD] [added: Flash] and [removed: flash] [added: HDD] technologies to efficiently support business [removed: growth,] [added: growth;] achieving best in class cost, quality and [removed: cycle-time,] [added: cycle-time;] maintaining industry leading manufacturing [removed: capabilities,] [added: capabilities;] and having a competitive advantage in supply-chain management.

- a broad product portfolio that differentiates us as a leading developer and manufacturer of integrated products and solutions based on both [removed: HDD] [added: Flash] and [removed: flash,] [added: HDD,] making us a more strategic supply partner to our large-scale customers who have storage needs across the data infrastructure ecosystem;

- efficient and flexible manufacturing capabilities, allowing us to leverage our [removed: HDD] [added: Flash] and [removed: flash] [added: HDD] R&D and capital expenditures to deliver innovative and cost-effective storage solutions to multiple markets; and

[removed: *Client Devices.*] We provide numerous data solutions that we incorporate into our client’s devices, which consist of HDD and SSD desktop and notebook PCs, smart video systems, gaming consoles and set top boxes, as well as flash-based embedded storage products for mobile phones, tablets, notebook PCs and other portable and wearable devices, automotive applications, Internet of Things, industrial and connected home applications.

Our [removed: HDDs] [added: HDD] and [removed: SSDs] [added: SSD] are designed for use in devices requiring high performance, reliability and capacity with various attributes such as low cost per [removed: gigabyte (“GB”),] [added: gigabyte,] quiet acoustics, low power consumption and protection against shocks.

Our capacity enterprise helium hard drives provide [removed: high capacity] [added: high-capacity] storage needs and low total cost of ownership per GB for the growing cloud data center market.

Our high-performance enterprise class [removed: SSDs] [added: SSD] include high-performance flash-based [removed: SSDs] [added: SSD] and software solutions that are optimized for performance applications providing a range of capacity and performance levels primarily for use in enterprise servers and supporting high volume on-line transactions, data analysis and other enterprise applications.

[removed: *Client Solutions.*] We provide consumers with a portfolio of [removed: HDDs] [added: HDD] and [removed: SSDs] [added: SSD] embedded into external storage products and removable [removed: flash-based products,] [added: Flash,] which include cards, universal serial bus (“USB”) flash drives and wireless drives, through our retail and channel routes to market.

We offer client portable [removed: SSDs] [added: SSD] with a range of capacities and performance characteristics to address a broad spectrum of the client storage market.

*Hard Disk Drives.* [removed: HDDs] [added: HDD products] provide non-volatile data storage by recording magnetic information on a rotating disk.

We have led the industry in innovation to drive increased areal density and [removed: high performance] [added: high-performance] attributes.

[added: Our multi-year product roadmap for high-capacity HDD, which combine ePMR, OptiNAND, UltraSMR and triple stage actuators to deliver a cutting edge portfolio of drives, in commercial volumes, at a wide variety of capacity points, puts Western Digital in great position to capitalize on the opportunities presented by the large and growing storage markets] We invest considerable resources in R&D, manufacturing infrastructure and capital equipment for recording head and media technology, as well as other aspects of the magnetic recording system such as HDD mechanics, controller and firmware technology, in order to secure our competitive position and cost structure.

[removed: *Flash Technologies.*] Flash [removed: based storage] products provide non-volatile data storage based on flash technology.

We devote significant research and development resources to the development of highly reliable, high-performance, cost-effective flash-based [removed: technology.][added: technology and are pursuing developments in next generation flash-based technology capacities.]

We focus our engineering efforts on [removed: coordinating] [added: optimizing] our product design and manufacturing processes to bring our products to market in a cost-effective and timely manner.

We have approximately [removed: 13,700] [added: 13,500] active patents worldwide and have many patent applications in process.

The critical elements of our production of [removed: HDD] [added: Flash] and [removed: flash-based products] [added: HDD] are high-volume and utilization, low-cost assembly and testing, strict adherence to quality metrics and maintaining close relationships with our strategic component suppliers to access best-in-class technology and manufacturing capacity.

[removed: HDD] [added: Flash] and [removed: flash-based product] [added: HDD] manufacturing are complex processes involving the production and assembly of precision components with narrow tolerances and rigorous testing.

Our vertically integrated, in-house assembly and test operations for our HDD products are concentrated in Prachinburi and Bang Pa-In, [removed: Thailand,] [added: Thailand;] Penang, Johor Bahru, and [removed: Sarawak, Malaysia,] [added: Kuching, Malaysia;] Laguna, [removed: Philippines,] [added: Philippines;] Shenzhen, [removed: China,] [added: China;] San Jose and Fremont, CA, USA.

Substantially all of our flash-based supply requirements for [removed: our flash-based products] [added: Flash] is obtained from our ventures with Kioxia, which provide us with leading-edge, high-quality and low-cost flash memory wafers.

Our business ventures with Kioxia are located primarily in [removed: Yokkaichi,] [added: Yokkaichi and Kitakami,] Japan, and our in-house assembly and test operations [added: are] located in Shanghai, China and Penang, Malaysia.

We are also obligated to fund 49.9% to [removed: 50%] [added: 50.0%] of each Flash Ventures entity’s capital investments to the extent that the Flash Ventures entity’s operating cash flow is insufficient to fund these investments.

[removed: Located] [added: We also have agreements that extend Flash Ventures to a wafer fabrication facility located] in Kitakami, Japan, [removed: K1] [added: referred to as “K1”, which] is operated by Kioxia Iwate Corporation, a wholly owned subsidiary of Kioxia.

Western Digital Corporation (“Western Digital”) is on a mission to unlock the potential of data by harnessing the possibility to use it.

We are a leading developer, manufacturer, and provider of data storage devices based on both flash-based products (“Flash”) and hard disk drives (“HDD”) technologies.

With much of the world’s data stored on Western Digital products, our innovation powers the global technology ecosystem from consumer devices to the edge to the heart of the cloud.

We compete with manufacturers of Flash and HDD for cloud, client, and consumer end markets.

In June 2022, we announced that we are reviewing potential strategic alternatives aimed at further optimizing long-term value for our stockholders.

The Executive Committee of our Board, chaired by our CEO, is overseeing the assessment process, and the potential strategic alternatives include, among other things, options for separating our Flash and HDD business units.

*Flash Technologies*.

Our broad portfolio of technology and products address multiple end markets and are comprised of the Western Digital®, SanDisk® and WD brands®.

In 2022, we refined the end markets we report to be “Cloud”, “Client” and “Consumer”.

Cloud represents a large and growing end market comprised primarily of products for public or private cloud environments and enterprise customers, which we believe we are uniquely positioned to address as the only provider of both flash and hard drive products.

We provide the Cloud end market with an array of high-capacity enterprise HDD and high-performance enterprise SSD, and platforms.

Through the Client end market, we provide our OEM and channel customers a broad array of high-performance flash and hard drive solutions across personal computer (“PC”), mobile, gaming consoles, automotive, virtual reality headsets, at-home entertainment, and industrial spaces.

The Consumer end market is highlighted by our broad range of retail and other end-user products, which capitalize on the strength of our product brand recognition and vast points of presence around the world.

For example, we are taking aggressive actions to restructure our client HDD manufacturing footprint in light of ongoing trends in the HDD Client market as PCs shift from using HDD to Flash technology.

K1 is now fully operational.

In January 2022, we entered into additional agreements regarding Flash Ventures’ investment in a new wafer fabrication facility currently under construction in Yokkaichi, Japan, referred to as “Y7”, which upon completion will be the sixth wafer fabrication facility at the Yokkaichi site.

The primary purpose of Y7 is to provide clean room space to continue the transition of existing flash-based wafer capacity to newer flash technology nodes.

The first phase of construction of Y7 is complete and output is expected to commence in the first half of 2023.

We sell our products to computer manufacturers and OEMs, cloud service providers, resellers, distributors and retailers throughout the world.

We have been on a journey to transform the Company and redefine the data storage market.

Our employees are paramount to our success.

To this end, our people strategy is grounded in the intention to hire, engage and retain the best talent to support our vision of creating breakthrough innovation that enables the world to actualize its aspirations.

In 2022, we hired a new Chief People Officer to help accelerate the transformation of our human resources function to be more people-centric and to drive better outcomes for the business.

We employ approximately 65,000 people worldwide, and our diverse team spans 38 countries.

By geography, approximately 86% of our employees are in Asia Pacific, 12% in the Americas, and 2% in Europe, the Middle East and Africa.

*Diversity, Equity and Inclusion*

We want to leverage the power and potential of diversity.

We are committed to promoting an inclusive environment where every individual can thrive through a sense of belonging, respect and contribution.

Our Employee Resource Groups (“ERGs”) help create an inclusive culture that embraces the uniqueness of our employees.

We have several ERG communities, focusing on women, LGBTQ+, racial and ethnic minorities, military and people with disabilities.

In 2022, we were once again recognized by Human Rights Campaign Best Places to Work for LGBTQ+ Equality 2022.

We also received the Above and Beyond Award and the Pro Patria Award from the Employer Support of the Guard and Reserve for our support of employees who serve in the U.S. National Guard and Reserve.

We are committed to hiring inclusively, providing training and development opportunities and ensuring equitable pay for employees, and we are continuing to focus on increasing diverse representation at every level of our company.

As of July 1, 2022, four of the nine members of our Board of Directors were women, and women represented 26% of our management positions and 23% of our technical staff.

We believe that developing a diverse talent pool of new college graduates is essential, and we saw percentage point increases of 2.5 for women, 1.4 for Hispanic/Latinx and 1.0 for multiracial representation among our new college graduates in 2022.

For additional detail about our workforce, we encourage you to review our Sustainability Report, which we publish annually and make available on our corporate website.

In 2022, we launched a self-identification initiative that invited employees to share more about who they are across dimensions of gender, gender identity, veterans and disabilities.

Participation was optional, data was protected and the results were anonymized.

We believe an in-depth understanding of our employee population will enable us to better engage and retain our talent.

*Compensation and Benefits*

Western Digital Corporation (“Western Digital”) is a leading developer, manufacturer, and provider of data storage devices and solutions that address the evolving needs of information technology (“IT”) and the infrastructure that enables the proliferation of data in virtually every industry.

We create environments for data to thrive.

Everywhere data lives, from advanced data centers to mobile sensors to personal devices, our industry-leading solutions deliver the possibilities of data.

Wherever data needs to be stored and accessed - from consumer devices such as cameras, drones and virtual reality headsets, to the most complex data centers - Western Digital is there.

To increase focus, drive innovation and improve execution, we have recently structured our operations with dedicated leadership of our two broad categories of technology: hard disk drives (“HDD”), which are based on rotating magnetic technology, and flash-based memory (“flash”), which is a semiconductor technology.

We compete with manufacturers of HDDs and flash-based memory for client devices and solutions, and data center devices and solutions.

We offer a broad line of data solutions to various end markets to meet the evolving storage needs of our customers.

*Data Center Devices & Solutions.* We provide an array of high-capacity enterprise HDDs and high-performance enterprise SSDs, and platforms.

The recording heads act as the “to brain” of the HDD and require semiconductor production equipment and technology to produce them.

We began shipping our 5th generation 112-layer BiCS5 products in 2020 and continue to pursue development of increased-capacity, lower-cost devices.

We also entered into additional agreements to extend Flash Ventures to a wafer fabrication facility known as “K1”.

In October 2020, Kioxia announced the start of construction of the shell for a new fabrication facility in Yokkaichi, Japan, referred to as “Y7”.

We expect to continue Flash Ventures investments into Y7 in due course, following the completion of agreements with Kioxia governing the construction and operation of the new facility and according to prevailing market trends.

While these groups of customers make up our end markets, some of these customers cross into multiple groups.

We define these customers as follows:

*Original Equipment Manufacturers.* OEMs purchase our products either directly or through a contract manufacturer such as an original design manufacturer (“ODM”) and assemble them into the devices they build and market under their own brands.

This category extends beyond traditional IT manufacturers and includes manufacturers that incorporate data and storage into their own products across a spectrum of applications, including gaming and personal devices, automotive, industrial and connected home applications.

OEMs typically seek to qualify two or more providers for each generation of products and generally will purchase products from those vendors for the life of that product.

Many of our OEM customers utilize just-in-time inventory management processes.

As a result, for certain OEMs, we maintain a base stock of finished goods inventory in facilities located near or adjacent to the OEM’s operations.

In addition, we sell flash storage solutions directly to customers that offer our products under their own brand name in the retail market, which we also classify as OEMs.

*Cloud.* A large and growing customer base are those who integrate our storage solutions to provide services to other companies and end users primarily through the cloud.

This customer base includes hyper-scale users that utilize our storage solutions to provide cloud-based services and infrastructure including IT services, social media, gaming, streaming media, advertising, cryptocurrency, research and other services to an ever-increasing market.

This group of customers purchase either directly, through an integrator, an ODM, an OEM or a combination of channels.

*Distributors.* We use a broad group of distributors to sell our products to non-direct customers such as small computer and consumer electronics manufacturers, dealers, value-added resellers, systems integrators, and other resellers.

Distributors generally enter into non-exclusive agreements with us for the purchase and redistribution of our products in specific territories.

*Retailers.* We sell our branded products directly to a select group of major retailers such as computer superstores, warehouse clubs, online retailers and computer electronics stores, and authorize sales through distributors to smaller retailers.

The retail channel complements our other sales channels while helping to build brand awareness for us and our products.

We also sell our branded products through our websites.

Our approximately 65,600 employees worldwide are our most valuable resource.

We believe we can achieve the best business outcomes by empowering our diverse and talented employees to make an impact together.

We are committed to an inclusive environment where every individual can thrive and contribute to our technology leadership across our broad product portfolio and operational excellence to deliver value for our customers.

The Compensation and Talent Committee of our Board of Directors is responsible for providing Board-level oversight and reviews our human capital management programs and initiatives, focusing on our culture, talent development, retention and equity, inclusion and diversity.

Our global workforce is based in the following geographic regions:

| | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Region | | | | | | Primary Functions | | | | | | Approximate # of Employees | | |

| Asia Pacific | | | | | | Manufacturing, engineering | | | | | | 54,200 | | |

| The Americas | | | | | | Engineering, manufacturing, R&D, shared services, sales and marketing | | | | | | 8,000 | | |

| Europe, the Middle East, Africa, Israel and India | | | | | | Sales, marketing, R&D and engineering | | | | | | 3,400 | | |

See Part II, Item 8, Note 14, *Income Tax Expense*, of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K for disclosures regarding statutory notices of deficiency issued by the Internal Revenue Service (“IRS”) in June 2018 and December 2018, petitions filed by the Company with the U.S. Tax Court in September 2018 and March 2019, additional penalties asserted by the IRS in March 2021 and further Amendments to Answers filed by the IRS in June 2021 and January 2022, and a tentative resolution with respect to such matters.

For a description of our legal proceedings, see Part II, Item 8, Note 17, *Legal Proceedings*, of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K.

For the fiscal year ended July [removed: 2, 2021][added: 1, 2022]

[removed: ][added: ]

| Common Stock, [removed: $.01] [added: $0.01] Par Value Per Share | | | WDC | | | The Nasdaq Stock Market LLC | | |

The aggregate market value of the registrant’s common stock held by non-affiliates of the registrant on December 31, [removed: 2020,] [added: 2021,] the last business day of the registrant’s most recently completed second fiscal quarter, was [removed: $13.5] [added: $17.0] billion, based on the closing sale price as reported on the Nasdaq Global Select Market.

There were [removed: 308,748,049] [added: 314,492,541] shares of common stock, par value $0.01 per share, outstanding as of the close of business on August [removed: 18, 2021.][added: 11, 2022.]

Part III incorporates by reference certain information from the registrant’s definitive proxy statement (the “Proxy Statement”) for the [removed: 2021] [added: 2022] Annual Meeting of Stockholders, which will be filed with the Securities and Exchange Commission within 120 days after the end of the [removed: 2021] [added: 2022] fiscal year.

| Item 1. | | | Business | | | [removed: [5](#i57fcb5c1c22443c7853b70e0d31a4d74_19)] [added: [4](#i9617800d5f64449f8d30837090e9701a_19)] | | |

| Item 1A. | | | Risk Factors | | | [removed: [13](#i57fcb5c1c22443c7853b70e0d31a4d74_22)] [added: [11](#i9617800d5f64449f8d30837090e9701a_22)] | | |

| Item 1B. | | | Unresolved Staff Comments | | | [removed: [27](#i57fcb5c1c22443c7853b70e0d31a4d74_25)] [added: [25](#i9617800d5f64449f8d30837090e9701a_25)] | | |

| Item 2. | | | Properties | | | [removed: [28](#i57fcb5c1c22443c7853b70e0d31a4d74_28)] [added: [26](#i9617800d5f64449f8d30837090e9701a_28)] | | |

| Item 3. | | | Legal Proceedings | | | [removed: [29](#i57fcb5c1c22443c7853b70e0d31a4d74_34)] [added: [28](#i9617800d5f64449f8d30837090e9701a_34)] | | |

| Item 4. | | | Mine Safety Disclosures | | | [removed: [29](#i57fcb5c1c22443c7853b70e0d31a4d74_34)] [added: [28](#i9617800d5f64449f8d30837090e9701a_34)] | | |

| Item 5. | | | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | | | [removed: [30](#i57fcb5c1c22443c7853b70e0d31a4d74_43)] [added: [29](#i9617800d5f64449f8d30837090e9701a_43)] | | |

| Item 7. | | | Management’s Discussion and Analysis of Financial Condition and Results of Operations | | | [removed: [33](#i57fcb5c1c22443c7853b70e0d31a4d74_52)] [added: [32](#i9617800d5f64449f8d30837090e9701a_52)] | | |

| Item 7A. | | | Quantitative and Qualitative Disclosures About Market Risk | | | [removed: [45](#i57fcb5c1c22443c7853b70e0d31a4d74_85)] [added: [46](#i9617800d5f64449f8d30837090e9701a_88)] | | |

| Item 8. | | | Financial Statements and Supplementary Data | | | [removed: [46](#i57fcb5c1c22443c7853b70e0d31a4d74_91)] [added: [47](#i9617800d5f64449f8d30837090e9701a_94)] | | |

| Item 9. | | | Changes in and Disagreements With Accountants on Accounting and Financial Disclosure | | | [removed: [100](#i57fcb5c1c22443c7853b70e0d31a4d74_205)] [added: [103](#i9617800d5f64449f8d30837090e9701a_217)] | | |

| Item 9A. | | | Controls and Procedures | | | [removed: [100](#i57fcb5c1c22443c7853b70e0d31a4d74_208)] [added: [103](#i9617800d5f64449f8d30837090e9701a_220)] | | |

| Item 9B. | | | Other Information | | | [removed: [101](#i57fcb5c1c22443c7853b70e0d31a4d74_2911)] [added: [104](#i9617800d5f64449f8d30837090e9701a_223)] | | |

| Item 9C. | | | Disclosure Regarding Foreign Jurisdictions that Prevent Inspections | | | [removed: [101](#i57fcb5c1c22443c7853b70e0d31a4d74_211)] [added: [104](#i9617800d5f64449f8d30837090e9701a_226)] | | |

| Item 10. | | | Directors, Executive Officers and Corporate Governance | | | [removed: [102](#i57fcb5c1c22443c7853b70e0d31a4d74_217)] [added: [105](#i9617800d5f64449f8d30837090e9701a_232)] | | |

| Item 11. | | | Executive Compensation | | | [removed: [102](#i57fcb5c1c22443c7853b70e0d31a4d74_220)] [added: [105](#i9617800d5f64449f8d30837090e9701a_235)] | | |

| Item 12. | | | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | | | [removed: [102](#i57fcb5c1c22443c7853b70e0d31a4d74_223)] [added: [105](#i9617800d5f64449f8d30837090e9701a_238)] | | |

| Item 13. | | | Certain Relationships and Related Transactions, and Director Independence | | | [removed: [102](#i57fcb5c1c22443c7853b70e0d31a4d74_226)] [added: [105](#i9617800d5f64449f8d30837090e9701a_241)] | | |

| Item 14. | | | Principal Accountant Fees and Services | | | [removed: [102](#i57fcb5c1c22443c7853b70e0d31a4d74_229)] [added: [105](#i9617800d5f64449f8d30837090e9701a_244)] | | |

| Item 15. | | | Exhibits and Financial Statement Schedules | | | [removed: [103](#i57fcb5c1c22443c7853b70e0d31a4d74_235)] [added: [106](#i9617800d5f64449f8d30837090e9701a_250)] | | |

| Item 16. | | | Form 10-K Summary | | | [removed: [107](#i57fcb5c1c22443c7853b70e0d31a4d74_241)] [added: [110](#i9617800d5f64449f8d30837090e9701a_256)] | | |

Western Digital, the Western Digital logo, [removed: G-Technology,] SanDisk and WD are registered trademarks or trademarks of Western Digital or its affiliates in the U.S. and/or other countries.

[removed: Forward-looking statements may include statements regarding our] [added: *•our] market position and portfolio [removed: synergies; consumer trends and market conditions.][added: synergies;*]

*•expectations regarding our Flash Ventures joint venture with Kioxia Corporation (“Kioxia”), the flash industry and our flash wafer output [removed: plans;*][added: plans and sources of funding for related expenditures;*]

[removed: *•product synergies and our] [added: *•our] product plans and business [removed: strategies;*][added: strategies, including our ongoing review of strategic alternatives;*]

[removed: - *expectations] [added: *•expectations] regarding [removed: pricing] [added: demand] trends and [added: market] conditions for our [removed: products;*][added: products and expected future financial performance;*]

*•expectations regarding our product [added: momentum and product] development and technology plans;*

[removed: - *expectations] [added: *•expectations] regarding capital [removed: investments] [added: expenditure plans] and [removed: sources of funding for those investments; and*][added: investments;*]

*•our beliefs regarding [added: our capital allocation plans and] the sufficiency of our available liquidity to meet our working capital, debt and capital expenditure needs.*

*These forward-looking statements are based on management’s current [removed: expectations] [added: expectations, represent the most current information available to the Company as of the date of this Annual Report on Form 10-K] and are subject to [removed: risks and] [added: a number of risks,] uncertainties [added: and other factors] that could cause actual results [added: or performance] to differ materially from those expressed or implied in the forward-looking statements.

You are urged to carefully review the disclosures we make concerning risks and other factors that may affect [added: the outcome of] our [added: forward-looking statements and our] business and operating results, including those made in Part I, Item 1A of this Annual Report on Form [removed: 10-K,] [added: 10-K] and any of those made in our other reports filed with the Securities and Exchange Commission.

We do not intend, and undertake no obligation, to [removed: publish revised] [added: update or revise these] forward-looking statements to reflect [removed: events] [added: new information] or [removed: circumstances] [added: events] after the date of this document or to reflect the occurrence of unanticipated [removed: events.*][added: events, except as required by law.*]

| Item 6. | | | \[Reserved\] | | | [31](#i9617800d5f64449f8d30837090e9701a_49) | | |

In this Annual Report on Form 10-K, we make references to our website at www.westerndigital.com.

References to our website through this Form 10-K are provided for convenience only and the content on our website does not constitute a part of, and shall not be deemed incorporated by reference into, this Annual Report on Form 10-K.

- *expectations regarding the global macroeconomic environment, including with respect to economic volatility and uncertainty, declines in consumer confidence and economic growth, customers reducing their inventories, rising interest rates and fuel prices, inflation, the ongoing conflict in Ukraine and the effects of the COVID-19 pandemic;*

*•expectations regarding supply chain conditions and constraints;*

- *expectations regarding our effective tax rate and our unrecognized tax benefits; and*

These risks and uncertainties are described in Part I, Item 1A of this Annual Report on Form 10-K.

| Item 6. | | | Selected Financial Data | | | [32](#i57fcb5c1c22443c7853b70e0d31a4d74_49) | | |

*•expectations regarding the effects of the COVID-19 pandemic and measures intended to reduce its spread;*

*•expectations regarding our cost saving initiatives;*

*•expectations regarding the outcome of legal proceedings in which we are involved;*

*•our reinvestment in the business and ongoing deleveraging efforts;*

*•our share repurchase program and resumption of our quarterly cash dividend policy;*

*•expectations regarding the repatriation of funds from our foreign operations;*

- *our beliefs regarding tax benefits and the timing of future payments, if any, relating to the unrecognized tax benefits, and the adequacy of our tax provisions;*

Our leased facilities [removed: are occupied under leases that expire] [added: have contracts expiring] at various times through 2034.

Our principal manufacturing, R&D, marketing and administrative facilities as of July [removed: 2, 2021] [added: 1, 2022] were as follows:

| Fremont | | | | | | Leased | | | | | | 290,000 | | | | | | [removed: Manufacturing] [added: HDD manufacturing] of head wafers and R&D | | |

| Irvine | | | | | | Leased | | | | | | [removed: 434,000] [added: 431,000] | | | | | | [added: HDD] R&D, administrative, marketing and sales | | |

| Milpitas | | | | | | Owned | | | | | | 589,000 | | | | | | [added: Flash] R&D, marketing and sales, and administrative | | |

| San Jose | | | | | | Owned | | | | | | 2,275,000 | | | | | | Manufacturing of head wafers, head, media and product development, [removed: R&D,] [added: R&D for Flash and HDD,] administrative, marketing and sales | | |

| Longmont | | | | | | Leased | | | | | | 87,000 | | | | | | [added: Flash] R&D | | |

| Colorado Springs | | | | | | Leased | | | | | | 59,000 | | | | | | [added: HDD] R&D | | |

| Rochester | | | | | | Leased | | | | | | [removed: 121,000] [added: 156,000] | | | | | | [removed: Product] [added: Flash and HDD product] development | | |

| Shanghai | | | | | | Owned | | | | | | 914,000 | | | | | | [removed: Assembly] [added: Flash assembly] and test of [removed: SSDs] [added: SSD] | | |

| Shenzhen | | | | | | Owned and Leased | | | | | | 563,000 | | | | | | [removed: Manufacturing] [added: HDD manufacturing] of media | | |

| Fujisawa | | | | | | Owned | | | | | | 661,000 | | | | | | [removed: Product] [added: HDD product] development | | |

| Johor | | | | | | Owned | | | | | | 277,000 | | | | | | [removed: Manufacturing] [added: HDD manufacturing] of substrates | | |

| Kuala Lumpur | | | | | | Owned | | | | | | 145,000 | | | | | | [added: HDD] R&D and administrative | | |

| Kuching | | | | | | Owned | | | | | | 285,000 | | | | | | [removed: Manufacturing] [added: HDD manufacturing] and development of substrates | | |

| Penang | | | | | | Owned | | | | | | [removed: 1,872,000] [added: 1,889,000] | | | | | | Assembly and test of [removed: SSDs,] [added: SSD,] manufacturing of media, and R&D [added: for Flash and HDD] | | |

| Laguna | | | | | | Owned | | | | | | 632,000 | | | | | | [removed: Manufacturing] [added: HDD manufacturing] of HGAs and slider fabrication | | |

| Bang Pa-In | | | | | | Owned and Leased | | | | | | [removed: 1,673,000] [added: 1,595,000] | | | | | | [removed: Slider] [added: HDD slider] fabrication, manufacturing of HDDs and HGAs, and R&D | | |

| Prachinburi | | | | | | Owned | | | | | | [removed: 1,566,000] [added: 1,568,000] | | | | | | [removed: Manufacturing of HDDs] [added: HDD manufacturing] | | |

| Bangalore | | | | | | Owned and Leased | | | | | | [removed: 638,000] [added: 1,261,000] | | | | | | [added: Flash] R&D and administrative | | |

| Kfar Saba | | | | | | Owned | | | | | | 167,000 | | | | | | [added: Flash] R&D | | |

| Tefen | | | | | | Owned | | | | | | 64,000 | | | | | | [added: Flash] R&D | | |

We believe our present facilities are adequate for our current needs, although we [removed: upgrade] [added: update] our facilities from time to time to meet anticipated future technological and market requirements.

In general, new manufacturing facilities can be developed and become operational within approximately [removed: nine] [added: 12] to [removed: eighteen] [added: 24] months should we require such additional facilities.

Substantially all of our flash-based memory wafers are manufactured by Kioxia in purpose-built, wafer fabrication facilities located in Yokkaichi and Kitakami, Japan.

Our common stock is listed on the Nasdaq Global Select Market (“Nasdaq”) under the symbol “WDC.” The approximate number of holders of record of our common stock as of August [removed: 18, 2021] [added: 11, 2022] was [removed: 893.][added: 874.]

[removed: For more information about our dividend policy] see Part II, Item 7, *Management’s Discussion and Analysis of Financial Condition and Results of Operations - Short and Long-term Liquidity.*

The following graph compares the cumulative total stockholder return of our common stock with the cumulative total return of the S&P 500 Index and the Dow Jones U.S. Technology Hardware & Equipment Index for the five years ended July [removed: 2, 2021.][added: 1, 2022.]

The graph assumes that $100 was invested in our common stock at the close of market on [removed: July 1, 2016] [added: June 30, 2017] and that all dividends were reinvested.

(Assumes $100 investment at market close on [removed: July 1, 2016)][added: June 30, 2017)]

[removed: ][added: ]

| | | | [removed: July 1, 2016 | | | | | |] June 30, 2017 | | | | | | June 29, 2018 | | | | | | June 28, 2019 | | | | | | July 3, 2020 | | | | | | July 2, 2021 | | | [added: | | | July 1, 2022 | | |]

| Dow Jones U.S. Technology Hardware & Equipment Index | | | $ | 100.00 | | | | | $ | [removed: 141.24] [added: 130.26] | | | | | $ | [removed: 183.98] [added: 140.45] | | | | | $ | [removed: 198.37] [added: 204.31] | | | | | $ | [removed: 288.56] [added: 315.74] | | | | | $ | [removed: 445.95] [added: 281.89] | |

For more information about our dividend policy.

| Western Digital Corporation | | | $ | 100.00 | | | | | $ | 89.48 | | | | | $ | 57.44 | | | | | $ | 52.78 | | | | | $ | 87.32 | | | | | $ | 54.00 | |

| S&P 500 Index | | | $ | 100.00 | | | | | $ | 114.37 | | | | | $ | 126.29 | | | | | $ | 135.77 | | | | | $ | 191.15 | | | | | $ | 170.86 | |

| Western Digital Corporation | | | $ | 100.00 | | | | | $ | 195.92 | | | | | $ | 175.32 | | | | | $ | 112.54 | | | | | $ | 103.42 | | | | | $ | 171.09 | |

| S&P 500 Index | | | $ | 100.00 | | | | | $ | 117.90 | | | | | $ | 134.84 | | | | | $ | 148.89 | | | | | $ | 160.06 | | | | | $ | 225.36 | |

| Report of Independent Registered Public Accounting Firm [added: (Auditor Firm ID: 185)] | | | [removed: [47](#i57fcb5c1c22443c7853b70e0d31a4d74_94)] [added: [48](#i9617800d5f64449f8d30837090e9701a_97)] | | |

| Consolidated Balance Sheets — As of July [removed: 2, 2021] [added: 1, 2022] and July [removed: 3, 2020] [added: 2, 2021] | | | [removed: [49](#i57fcb5c1c22443c7853b70e0d31a4d74_97)] [added: [51](#i9617800d5f64449f8d30837090e9701a_100)] | | |

| Consolidated Statements of Operations — Three Years Ended July [removed: 2, 2021] [added: 1, 2022] | | | [removed: [50](#i57fcb5c1c22443c7853b70e0d31a4d74_100)] [added: [52](#i9617800d5f64449f8d30837090e9701a_103)] | | |

| Consolidated Statements of Comprehensive Income (Loss) — Three Years Ended July [removed: 2, 2021] [added: 1, 2022] | | | [removed: [51](#i57fcb5c1c22443c7853b70e0d31a4d74_103)] [added: [53](#i9617800d5f64449f8d30837090e9701a_106)] | | |

| Consolidated Statements of Cash Flows — Three Years Ended July [removed: 2, 2021] [added: 1, 2022] | | | [removed: [52](#i57fcb5c1c22443c7853b70e0d31a4d74_106)] [added: [54](#i9617800d5f64449f8d30837090e9701a_109)] | | |

| Consolidated Statements of Shareholders' Equity — Three Years Ended July [removed: 2, 2021] [added: 1, 2022] | | | [removed: [53](#i57fcb5c1c22443c7853b70e0d31a4d74_109)] [added: [55](#i9617800d5f64449f8d30837090e9701a_112)] | | |

[removed: | Notes to Consolidated Financial Statements | | | [54](#i57fcb5c1c22443c7853b70e0d31a4d74_115) | | |][added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)]

[removed: *Opinions] [added: Opinions] on the [removed: Consolidated] [added: *Consolidated] Financial [removed: Statements] [added: Statements*] and Internal Control Over Financial [removed: Reporting*][added: Reporting]

We have audited the accompanying consolidated balance sheets of Western Digital Corporation and subsidiaries (the Company) as of July [removed: 2, 2021] [added: 1, 2022] and July [removed: 3, 2020,] [added: 2, 2021,] the related consolidated statements of operations, comprehensive income (loss), cash flows and shareholders’ equity for each of the years in the three-year period ended July [removed: 2, 2021,] [added: 1, 2022,] and the related notes (collectively, the consolidated financial statements).

We also have audited the Company’s internal control over financial reporting as of July [removed: 2, 2021,] [added: 1, 2022,] based on criteria established in [removed: *Internal] [added: Internal] Control [removed: -] [added: –] Integrated [removed: Framework* *(2013)*] [added: Framework (2013)] issued by the Committee of Sponsoring Organizations of the Treadway Commission.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of July [removed: 2, 2021] [added: 1, 2022] and July [removed: 3, 2020,] [added: 2, 2021,] and the results of its operations and its cash flows for each of the years in the three-year period ended July [removed: 2, 2021,] [added: 1, 2022,] in conformity with U.S. generally accepted accounting principles.

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of July [removed: 2, 2021,] [added: 1, 2022,] based on criteria established in [removed: *Internal] [added: Internal] Control [removed: -] [added: –] Integrated Framework [removed: (2013)*] [added: (2013)] issued by the Committee of Sponsoring Organizations of the Treadway Commission.

[removed: *Basis] [added: Basis] for [removed: Opinions*][added: Opinions]

[removed: *Definition] [added: Definition] and Limitations of Internal Control Over Financial [removed: Reporting*][added: Reporting]

[removed: *Critical] [added: Critical] Audit [removed: Matter*][added: Matters]

The critical audit [removed: matter] [added: matters] communicated below [removed: is a matter] [added: are matters] arising from the current period audit of the consolidated financial statements that [removed: was] [added: were] communicated or required to be communicated to the audit committee and that: (1) [removed: relates] [added: relate] to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of [removed: a] critical audit [removed: matter] [added: matters] does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit [removed: matter] [added: matters] below, providing [removed: a] separate [removed: opinion] [added: opinions] on the critical audit [removed: matter] [added: matters] or on the accounts or disclosures to which [removed: it relates.][added: they relate.]

We evaluated the Company’s ability to [removed: accurately] [added: reasonably] estimate the assumptions used to determine the variable consideration by comparing historically recorded variable consideration to actual subsequent payments and credits.

[removed: | | | |] /s/ KPMG LLP [removed: | | |]

| | | | [added: | | | | | | | | | | | |] July [added: 1, 2022 | | | | | | July] 2, 2021 | | | | | | July 3, 2020 | | |

| Cash and cash equivalents | | | $ | [removed: 3,370] [added: 2,327] | | | | | $ | [removed: 3,048] [added: 3,370] | |

| Accounts receivable, net | | | [removed: 2,257] [added: 2,804] | | | | | | [removed: 2,379] [added: 2,257] | | |

| Inventories | | | [removed: 3,616] [added: 3,638] | | | | | | [removed: 3,070] [added: 3,616] | | |

| Other current assets | | | [removed: 514] [added: 684] | | | | | | [removed: 551] [added: 514] | | |

| Total current assets | | | [removed: 9,757] [added: 9,453] | | | | | | [removed: 9,048] [added: 9,757] | | |

| Property, plant and equipment, net | | | [removed: 3,188] [added: 3,670] | | | | | | [removed: 2,854] [added: 3,188] | | |

| Notes receivable and investments in Flash Ventures | | | [removed: 1,586] [added: 1,396] | | | | | | [removed: 1,875] [added: 1,586] | | |

| Goodwill | | | [removed: 10,066] [added: 10,041] | | | | | | [removed: 10,067] [added: 10,066] | | |

| Other intangible assets, net | | | [removed: 442] [added: 213] | | | | | | [removed: 941] [added: 442] | | |

| Other non-current assets | | | [removed: 1,093] [added: 1,486] | | | | | | [removed: 877] [added: 1,093] | | |

| Total assets | | | $ | [removed: 26,132] [added: 26,259] | | | | | $ | [removed: 25,662] [added: 26,132] | |

| Accounts payable | | | $ | [removed: 1,934] [added: 1,902] | | | | | $ | [removed: 1,945] [added: 1,934] | |

| Accounts payable to related parties | | | [removed: 398] [added: 320] | | | | | | [removed: 407] [added: 398] | | |

| Accrued compensation | | | [removed: 634] [added: 510] | | | | | | [removed: 472] [added: 634] | | |

| Current portion of long-term debt | | | [removed: 251] [added: —] | | | | | | [removed: 286] [added: 251] | | |

| Total current liabilities | | | [removed: 4,870] [added: 5,237] | | | | | | [removed: 4,406] [added: 4,870] | | |

| Long-term debt | | | [removed: 8,474] [added: 7,022] | | | | | | [removed: 9,289] [added: 8,474] | | |

| Other liabilities | | | [removed: 2,067] [added: 1,779] | | | | | | [removed: 2,416] [added: 2,067] | | |

| Total liabilities | | | [removed: 15,411] [added: 14,038] | | | | | | [removed: 16,111] [added: 15,411] | | |

| Commitments and contingencies (Notes [removed: 9,] 10, [added: 11,] 14 and 17) | | | | | | | | | | | |

| Notes to Consolidated Financial Statements | | | [56](#i9617800d5f64449f8d30837090e9701a_118) | | |

*Goodwill Re-allocation - Fair Value of the Reporting Units*

As discussed in Notes 1 and 3 to the consolidated financial statements, historically, the Company had been managed and reported under a single operating segment.

Effective July 3, 2021, the Company’s management finalized its assessment of the Company’s operating segments and concluded that the Company now has two operating segments: Flash and HDD.

In connection with the Company’s determination of its operating segments, effective July 3, 2021, the Company determined that its operating segments were also its reporting units and re-allocated its goodwill between its reporting units based on the estimated relative fair values of the reporting units, with $4,328 million allocated to the HDD reporting unit and $5,738 million allocated to the Flash reporting unit.

We identified the assessment of the fair value of the reporting units as of July 3, 2021 as a critical audit matter.

Subjective auditor judgment was required in assessing the forecasted revenue and forecasted cost of revenue assumptions used in the income approach to estimate the fair value of the reporting units.

The assessment of these assumptions was challenging due to the degree of uncertainty related to the forecasted revenue and cost of revenue.

Differences in judgment used to determine these assumptions could have a significant effect on the reporting units’ estimated fair value and the resulting re-allocation of goodwill.

The following are the primary procedures we performed to address this critical audit matter.

We evaluated the design and tested the operating effectiveness of certain internal controls related to the Company’s process to estimate the

reporting units’ fair value, including controls related to the determination of the forecasted revenue and forecasted cost of revenue assumptions for the reporting units.

We evaluated the Company’s forecasted revenue and cost of revenue assumptions by:

- comparing the forecasted revenue and cost of revenue to the Company’s budget,

- comparing the forecasted revenue and cost of revenue to actual revenue and cost of revenue recorded subsequent to the measurement date,

- comparing the forecasted revenue growth rate to the actual revenue growth rate in prior years,

- comparing the forecasted cost of revenue to actual cost of revenue in prior years,

- comparing the forecasted revenue growth rate to the forecasted revenue growth rate projected for peer companies and the industry, as well as other economic data, and

- comparing the forecasted gross margin to historical gross margin for peer companies.

| Accrued expenses | | | 1,636 | | | | | | 1,390 | | |

| Income taxes payable | | | 869 | | | | | | 263 | | |

| Net income (loss) | | | $ | 1,500 | | | | | $ | 821 | | | | | $ | (250) | |

| Gain on business divestiture | | | (9) | | | | | | — | | | | | | — | | |

| Accrued expenses | | | 246 | | | | | | 257 | | | | | | 103 | | |

| Income taxes payable | | | (74) | | | | | | 95 | | | | | | 81 | | |

| Proceeds from dispositions of business | | | 32 | | | | | | — | | | | | | — | | |

| Proceeds from debt | | | 1,894 | | | | | | — | | | | | | — | | |

| Noncash exchange of Term Loan A-1 for Term Loan A-2 | | | $ | 2,104 | | | | | $ | — | | | | | $ | — | |

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| Net income | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,500 | | | | | | 1,500 | | |

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| --- | --- | --- | --- | --- | --- |

August 26, 2021

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| Accrued expenses | | | 1,653 | | | | | | 1,296 | | |

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| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | Year Ended | | | | | | | | | | | | | | | | | | | | |

| Accrued expenses | | | 352 | | | | | | 184 | | | | | | (42) | | |

| Purchases of investments | | | — | | | | | | — | | | | | | (79) | | |

| Proceeds from sale of investments | | | — | | | | | | — | | | | | | 175 | | |

| Proceeds from maturities of investments | | | — | | | | | | — | | | | | | 7 | | |

| Repurchases of common stock | | | — | | | | | | — | | | | | | (563) | | |

| Repayment of revolving credit facility | | | — | | | | | | — | | | | | | (500) | | |

| Balance at June 29, 2018 | | | 312 | | | | | | $ | 3 | | | | | (16) | | | | | | $ | (1,444) | | | | | $ | 4,254 | | | | | $ | (39) | | | | | $ | 8,757 | | | | | $ | 11,531 | |

| Net loss | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (754) | | | | | | (754) | | |

| Adoption of new accounting standards | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 56 | | | | | | 56 | | |

| Repurchases of common stock | | | — | | | | | | — | | | | | | (8) | | | | | | (563) | | | | | | — | | | | | | — | | | | | | — | | | | | | (563) | | |

| Dividends to shareholders | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 27 | | | | | | — | | | | | | (610) | | | | | | (583) | | |

However, actual results could differ materially from these estimates and be significantly affected by the severity and duration of the pandemic, the extent of actions to contain or treat COVID-19, the timing, distribution, efficacy and public acceptance of vaccines around the world, any possible resurgence of COVID-19, including the emergence of more contagious or vaccine-resistant variants and how quickly and to what extent normal economic and operating activity can resume.

In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606),” which superseded the requirements in Accounting Standards Codification (“ASC”) 605 “Revenue Recognition” (Topic 605)”.

Topic 606 outlines a comprehensive five-step revenue recognition model based on the principle that an entity should recognize revenue when control of the promised goods or services is transferred to customers at an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services.

Topic 606 also requires more detailed disclosures to enable users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers.

The Company adopted Topic 606 effective June 30, 2018, using the modified retrospective method to all contracts that were not completed contracts as of the beginning of the fiscal year.

The cumulative effect of adopting Topic 606 was a post-tax increase to the opening retained earnings of $56 million as of June 30, 2018, which was primarily related to the Company’s license and royalty revenue arrangements.

These arrangements had no remaining performance obligations but were previously recognized under Topic 605 when they were reported to the Company by its licensees, which was generally one quarter in arrears from the licensees’ sales of the licensed products.

Adoption of the standard did not have a material impact on the Company’s financial position, results of operations, and cash flows.

The Company offers a broad range of data storage products that include Client Devices, Data Center Devices and Solutions, and Client Solutions.

Client Devices consist of hard disk drives (“HDDs”) and solid state drives (“SSDs”) for computing devices; flash-based embedded storage products; and flash-based memory wafers.

Data Center Devices and Solutions consist of high-capacity enterprise HDDs and high-performance enterprise SSDs, data center software and system solutions.

Client Solutions consist of HDDs and SSDs embedded into external storage products and removable flash-based products.

The Company also generates license and royalty revenue related to its IP patent licenses.

An immaterial amount of the Company’s revenue arrangements include contracts that contain more than one performance obligation, which are typically comprised of tangible products, software and support services for multiple distinct licenses.

Where a separate standalone selling price is not available, the transaction price is based on the Company’s best estimate of the standalone selling price.

The Company uses one or a combination of more than one of the following methods to estimate the standalone selling price: the adjusted market assessment approach, the expected cost plus a margin approach, or another suitable method based on the facts and circumstances.

In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”).

ASU 2016-13 seeks to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments, including trade receivables, and other commitments to extend credit held by a reporting entity at each reporting date.

The amendments require an entity to replace the incurred loss impairment methodology in current U.S. GAAP with a methodology that reflects current expected credit losses and requires consideration of a broader

range of reasonable and supportable information to inform credit loss estimates.

In November 2018, the FASB issued ASU No. 2018-18, “Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606” (“ASU 2018-18”).

There has been no change in our internal control over financial reporting during the fourth [removed: fiscal] quarter ended July [removed: 2, 2021,] [added: 1, 2022,] that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

In the third quarter of fiscal 2021, we substantially completed the initial implementation of our enterprise resource planning system on a worldwide basis.

These system changes resulted in the modification of certain processes and controls, but no changes materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Going forward, we expect to make routine enhancements and modifications in the normal course of business.

In addition, as noted previously, we are implementing new reporting modules and processes to provide more discrete information to support our new organizational structure.

As we implement these enhancements and modifications in future periods, we will continue to assess the impact on our internal control over financial reporting.

*Disclosure Pursuant to Section 13(r) of the Securities Exchange Act of 1934*

On March 2, 2021, the U.S. government designated the Russian Federal Security Service (the “FSB”) as a blocked party under Executive Order 13382; however, on the same day, the U.S. Department of the Treasury’s Office of Foreign Assets Control issued General License No. 1B (the “OFAC General License”), which generally authorizes U.S. companies to engage in certain transactions and dealings with the FSB necessary and ordinarily incident to requesting or obtaining licenses, permits, certifications or notifications issued or registered by the FSB for the importation, distribution or use of information technology products in the Russian Federation.

Prior to February 24, 2022, in the normal course of business and as permitted and authorized by the OFAC General License, we filed notifications with, or applied for import licenses and permits from, the FSB as required pursuant to Russian encryption product import controls for the purpose of enabling us or our channel partners to import and distribute certain products in the Russian Federation.

There are no gross revenues or net profits directly associated with these activities, and we do not distribute or sell products or provide services to the FSB.

After February 24, 2022, we ceased shipments into Russia and we have not filed notifications with or applied for import licenses and permits from the FSB since such date.

We expect to resume filing notifications with and applications for import licenses and permits from the FSB to qualify our products for importation and distribution in the Russian Federation if and when we decide to resume sales into the Russian Federation and as permitted by applicable U.S. law, including the OFAC General License.

On August 23, 2021, we entered into a Separation and General Release Agreement with Lori Sundberg, Executive Vice President and Chief Human Resources Officer (the “Separation Agreement”).

Ms. Sundberg has agreed to continue in an advisory capacity through October 1, 2021 to assist with the transition of her duties and responsibilities.

Pursuant to the Separation Agreement, Ms. Sundberg will receive the Tier I severance benefits to which she is entitled pursuant to the terms and conditions of our Amended and Restated Executive Severance Plan, the material terms of which have been previously disclosed and a copy of which is filed as Exhibit 10.7 to this Annual Report on Form 10-K (the “Separation Benefits”).

Ms. Sundberg’s receipt of the Separation Benefits is subject to her non-revocation of a general release of claims included in the Separation Agreement and compliance with the terms of the Separation Agreement, including certain non-solicitation and cooperation provisions.

There is incorporated herein by reference the information required by this Item included in the Company’s Proxy Statement for the [removed: 2021] [added: 2022] Annual Meeting of Stockholders, which will be filed with the SEC no later than 120 days after the close of the [removed: fiscal] year ended July [removed: 2, 2021.][added: 1, 2022.]

The current version of the Code of Business Ethics is available on our website under the Corporate Governance section at [removed: *www.wdc.com*.][added: *www.westerndigital.com*.]

To the extent required by rules adopted by the SEC and The Nasdaq Stock Market LLC, we intend to promptly disclose future amendments to certain provisions of the Code of Business Ethics, or waivers of such provisions granted to executive officers and directors, on our website under the Corporate Governance section at [removed: *www.wdc.com*.][added: *www.westerndigital.com*.]

There is incorporated herein by reference the information required by this Item included in the Company’s Proxy Statement for the [removed: 2021] [added: 2022] Annual Meeting of Stockholders, which will be filed with the SEC no later than 120 days after the close of the [removed: fiscal] year ended July [removed: 2, 2021.][added: 1, 2022.]

There is incorporated herein by reference the information required by this Item included in the Company’s Proxy Statement for the [removed: 2021] [added: 2022] Annual Meeting of Stockholders, which will be filed with the SEC no later than 120 days after the close of the [removed: fiscal] year ended July [removed: 2, 2021.][added: 1, 2022.]

There is incorporated herein by reference the information required by this Item included in the Company’s Proxy Statement for the [removed: 2021] [added: 2022] Annual Meeting of Stockholders, which will be filed with the SEC no later than 120 days after the close of the [removed: fiscal] year ended July [removed: 2, 2021.][added: 1, 2022.]

There is incorporated herein by reference the information required by this Item included in the Company’s Proxy Statement for the [removed: 2021] [added: 2022] Annual Meeting of Stockholders, which will be filed with the SEC no later than 120 days after the close of the [removed: fiscal] year ended July [removed: 2, 2021.][added: 1, 2022.]

| [removed: [4.1](https://www.sec.gov/Archives/edgar/data/106040/000010604021000040/wdc-2021q4ex41.htm)] [added: [21](https://www.sec.gov/Archives/edgar/data/106040/000010604022000055/wdc-2022q4ex21.htm)] | | | | | | [removed: Description] [added: Subsidiaries] of Western Digital [removed: Corporation’s Capital Stock†] [added: Corporation†] | | |

| [removed: [10.1.1](https://www.sec.gov/Archives/edgar/data/0000106040/000095012311093040/c22815exv10w2.htm)] [added: [10.1.8](https://www.sec.gov/Archives/edgar/data/106040/000010604016000019/wdc-010116xexhibit1011.htm)] | | | | | | Form of Notice of Grant of Stock Option and Option Agreement - Executives, [added: as amended on November 3, 2015,] under the Western Digital Corporation Amended and Restated 2004 Performance Incentive Plan (now named the Western Digital Corporation 2017 Performance Incentive Plan) (Filed as Exhibit [removed: 10.2] [added: 10.1.1] to the Company’s Quarterly Report on Form 10-Q (File No. 1-08703) with the Securities and Exchange Commission on [removed: October 28, 2011)*] [added: February 10, 2016)*] | | |

| [removed: [10.1.2](https://www.sec.gov/Archives/edgar/data/0000106040/000010604018000010/wdc-2018q2ex1013.htm)] [added: [10.1.1](https://www.sec.gov/Archives/edgar/data/106040/000010604018000010/wdc-2018q2ex1014.htm)] | | | | | | Form of Notice of Grant of Stock Units and Stock Unit Award [removed: Agreement - Executives,] [added: Agreement,] under the Western Digital Corporation 2017 Performance Incentive Plan (Filed as Exhibit [removed: 10.1.3] [added: 10.1.4] to the Company’s Quarterly Report on Form 10-Q (File No. 1-08703) with the Securities and Exchange Commission on February 6, 2018)* | | |

| [removed: [10.1.3](https://www.sec.gov/Archives/edgar/data/0000106040/000010604018000010/wdc-2018q2ex1014.htm)] [added: [10.1.14](https://www.sec.gov/Archives/edgar/data/106040/000010604021000053/wdc-2022q1ex104.htm)] | | | | | | Form of Notice of Grant of [added: Restricted] Stock Units and [added: Restricted] Stock Unit Award [removed: Agreement,] [added: Agreement] under the Western Digital Corporation 2017 Performance Incentive Plan (Filed as Exhibit [removed: 10.1.4] [added: 10.4] to the Company’s Quarterly Report on Form 10-Q (File No. 1-08703) with the Securities and Exchange Commission on [removed: February] [added: November] 6, 2018)* | | |

| [removed: [10.1.4](https://www.sec.gov/Archives/edgar/data/0000106040/000010604018000034/wdc-2019q1ex101.htm)] [added: [10.1.2](https://www.sec.gov/Archives/edgar/data/106040/000010604019000075/wdc-2020q1ex101.htm)] | | | | | | Form of Notice of Grant of Performance Stock Units and Performance Stock Unit Award Agreement - Financial Measures, under the Western Digital Corporation 2017 Performance Incentive Plan (Filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q (File No. 1-08703) with the Securities and Exchange Commission on November [removed: 6, 2018)*] [added: 12, 2019)*] | | |

| [removed: [10.1.5](https://www.sec.gov/Archives/edgar/data/0000106040/000010604018000034/wdc-2019q1ex102.htm)] [added: [10.1.3](https://www.sec.gov/Archives/edgar/data/106040/000010604019000075/wdc-2020q1ex102.htm)] | | | | | | Form of Notice of Grant of Performance Stock Units and Performance Stock Unit Award Agreement - TSR Measure, under the Western Digital Corporation 2017 Performance Incentive Plan (Filed as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q (File No. 1-08703) with the Securities and Exchange Commission on November [removed: 6, 2018)*] [added: 12, 2019)*] | | |

| [removed: [10.1.6](https://www.sec.gov/Archives/edgar/data/0000106040/000010604019000075/wdc-2020q1ex101.htm)] [added: [10.1.6](https://www.sec.gov/Archives/edgar/data/106040/000010604021000053/wdc-2022q1ex101.htm)] | | | | | | Form of Notice [removed: of] [added: and] Grant of Performance Stock Units and Performance Stock Unit Award [removed: Agreement -] [added: Agreement-] Financial [removed: Measures,] [added: Measure,] under the [added: Amended and Restated] Western Digital Corporation 2017 Performance Incentive Plan (Filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q (File No. 1-08703) with the Securities and Exchange Commission on November [removed: 12, 2019)*] [added: 4, 2021)*] | | |

| [removed: [10.1.7](https://www.sec.gov/Archives/edgar/data/0000106040/000010604019000075/wdc-2020q1ex102.htm)] [added: [10.1.7](https://www.sec.gov/Archives/edgar/data/106040/000010604021000053/wdc-2022q1ex102.htm)] | | | | | | Form of Notice [removed: of] [added: and] Grant of Performance Stock Units and Performance Stock Unit Award [removed: Agreement -] [added: Agreement-] TSR Measure, under the [added: Amended and Restated] Western Digital Corporation 2017 Performance Incentive Plan (Filed as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q (File No. 1-08703) with the Securities and Exchange Commission on November [removed: 12, 2019)*] [added: 4, 2021)*] | | |

| [removed: [10.1.8](https://www.sec.gov/Archives/edgar/data/0000106040/000010604021000011/wdc-2021q2ex102.htm)] [added: [10.1.4](https://www.sec.gov/Archives/edgar/data/106040/000010604021000011/wdc-2021q2ex102.htm)] | | | | | | Form of Notice of Grant of Performance Stock Units and Performance Stock Unit Award Agreement – Financial Measure, under the Amended and Restated Western Digital Corporation 2017 Performance Incentive Plan (Filed as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q (File No. 1-08703) with the Securities and Exchange Commission on February 9, 2021)* | | |

| [removed: [10.1.9](https://www.sec.gov/Archives/edgar/data/0000106040/000010604021000011/wdc-2021q2ex102.htm)] [added: [10.1.5](https://www.sec.gov/Archives/edgar/data/106040/000010604021000011/wdc-2021q2ex102.htm)] | | | | | | Form of Notice of Grant of Performance Stock Units and Performance Stock Unit Award Agreement – TSR Measure, under the Amended and Restated Western Digital Corporation 2017 Performance Incentive Plan (Filed as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q (File No. 1-08703) with the Securities and Exchange Commission on February 9, 2021)* | | |

| [removed: [10.1.10](https://www.sec.gov/Archives/edgar/data/106040/000010604016000019/wdc-010116xexhibit1011.htm)] [added: [10.1.10](https://www.sec.gov/Archives/edgar/data/106040/000010604018000034/wdc-2019q1ex103.htm)] | | | | | | Form of Notice of Grant of [added: Restricted] Stock [removed: Option] [added: Units] and [removed: Option] [added: Restricted Stock Unit Award] Agreement - [removed: Executives, as amended on November 3, 2015, under the Western Digital Corporation Amended] [added: Vice President] and [removed: Restated 2004 Performance Incentive Plan (now named] [added: Above under] the Western Digital Corporation 2017 Performance Incentive [removed: Plan)] [added: Plan] (Filed as Exhibit [removed: 10.1.1] [added: 10.3] to the Company’s Quarterly Report on Form 10-Q (File No. 1-08703) with the Securities and Exchange Commission on [removed: February 10, 2016)*] [added: November 6, 2018)*] | | |

| [removed: [10.1.11](https://www.sec.gov/Archives/edgar/data/106040/000010604016000019/wdc-010116xexhibit1014.htm)] [added: [10.1.11](https://www.sec.gov/Archives/edgar/data/106040/000010604019000075/wdc-2020q1ex103.htm)] | | | | | | Form of Notice of Grant of [added: Restricted] Stock Units and [added: Restricted] Stock Unit Award [removed: Agreement, as amended on November 3, 2015, under the Western Digital Corporation Amended] [added: Agreement - Vice President] and [removed: Restated 2004 Performance Incentive Plan (now named] [added: Above under] the Western Digital Corporation 2017 Performance Incentive [removed: Plan)] [added: Plan] (Filed as Exhibit [removed: 10.1.4] [added: 10.3] to the Company’s Quarterly Report on Form 10-Q (File No. 1-08703) with the Securities and Exchange Commission on [removed: February 10, 2016)*] [added: November 12, 2019)*] | | |

| [removed: [10.1.12](https://www.sec.gov/Archives/edgar/data/0000106040/000010604018000010/wdc-2018q2ex102.htm)] [added: [10.1.9](https://www.sec.gov/Archives/edgar/data/106040/000010604021000053/wdc-2022q1ex104.htm)] | | | | | | Western Digital Corporation [added: Amended and Restated] 2017 Performance Incentive Plan Non-Employee Director Restricted Stock Unit Grant Program, [removed: as] amended [removed: November 1, 2017] [added: and restated as of August 16, 2021] (Filed as Exhibit [removed: 10.2] [added: 10.4] to the Company’s Quarterly Report on Form 10-Q (File No. 1-08703) with the Securities and Exchange Commission on [removed: February 6, 2018)*] [added: November 4, 2021)*] | | |

| [10.1.13](https://www.sec.gov/Archives/edgar/data/0000106040/000010604018000034/wdc-2019q1ex103.htm) | | | | | | Form of Notice of Grant of Restricted Stock Units and Restricted Stock Unit Award Agreement - Vice President and [removed: Above] [added: Above,] under the [added: Amended and Restated] Western Digital Corporation 2017 Performance Incentive Plan (Filed as Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q (File No. 1-08703) with the Securities and Exchange Commission on November [removed: 6, 2018)*] [added: 4, 2021)*] | | |

| [removed: [10.1.14](https://www.sec.gov/Archives/edgar/data/0000106040/000010604019000075/wdc-2020q1ex103.htm)] [added: [10.1.12](https://www.sec.gov/Archives/edgar/data/106040/000010604021000011/wdc-2021q2ex104.htm)] | | | | | | Form of Notice of Grant of Restricted Stock Units and Restricted Stock Unit Award Agreement [removed: -] [added: –] Vice President and [removed: Above] [added: Above,] under the [added: Amended and Restated] Western Digital Corporation 2017 Performance Incentive Plan (Filed as Exhibit [removed: 10.3] [added: 10.4] to the Company’s Quarterly Report on Form 10-Q [removed: (File] [added: (Filed] No. 1-08703) with the Securities and Exchange Commission on [removed: November 12, 2019)*] [added: February 9, 2021)*] | | |

| [removed: [10.1.15](https://www.sec.gov/Archives/edgar/data/0000106040/000010604021000011/wdc-2021q2ex104.htm)] [added: [10.3.3](https://www.sec.gov/Archives/edgar/data/106040/000010604022000018/wdc-2022q2ex104.htm)] | | | | | | Form of [removed: Notice of] Grant [removed: of Restricted Stock Units and] [added: Notice for] Restricted Stock Unit Award [removed: Agreement] – Vice President and Above, under the [removed: Amended and Restated] Western Digital Corporation [removed: 2017 Performance] [added: 2021 Long-Term] Incentive Plan (Filed as Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q [removed: (Filed] [added: (File] No. 1-08703) with the Securities and Exchange Commission on February [removed: 9, 2021)*] [added: 3, 2022)*] | | |

| [removed: [10.1.16](https://www.sec.gov/Archives/edgar/data/0000106040/000010604018000034/wdc-2019q1ex104.htm)] [added: [10.3.1](https://www.sec.gov/Archives/edgar/data/106040/000010604022000018/wdc-2022q2ex102.htm)] | | | | | | Form of [removed: Notice of] Grant [removed: of Restricted Stock Units and Restricted] [added: Notice for Performance] Stock Unit Award [removed: Agreement] [added: (TSR Measure)] under the Western Digital Corporation [removed: 2017 Performance] [added: 2021 Long-Term] Incentive Plan (Filed as Exhibit [removed: 10.4] [added: 10.2] to the Company’s Quarterly Report on Form 10-Q (File No. 1-08703) with the Securities and Exchange Commission on [removed: November 6, 2018)*] [added: February 3, 2022)*] | | |

| [removed: [10.1.17](https://www.sec.gov/Archives/edgar/data/0000106040/000010604020000024/wdc-2020q3ex102.htm)] [added: [10.1.15](https://www.sec.gov/Archives/edgar/data/106040/000010604020000024/wdc-2020q3ex103.htm)] | | | | | | Notice of Grant of [removed: Restricted] [added: Performance] Stock Units and [removed: Restricted] [added: Performance] Stock Unit Award [removed: Agreement] – [removed: CEO] [added: TSR Measure (CEO] Sign-On [removed: Award] [added: Award)] (Filed as Exhibit [removed: 10.2] [added: 10.3] to the Company’s Quarterly Report on Form 10-Q (File No. 1-08703) with the Securities and Exchange Commission on May 8, 2020)* | | |

| [removed: [10.1.18](https://www.sec.gov/Archives/edgar/data/0000106040/000010604020000024/wdc-2020q3ex103.htm)] [added: [10.1.16](https://www.sec.gov/Archives/edgar/data/106040/000119312522176478/d340008dex101.htm)] | | | | | | [added: First Amendment to the] Notice of Grant of Performance Stock Units and Performance Stock Unit Award – TSR Measure (CEO Sign-On Award) (Filed as Exhibit [removed: 10.3] [added: 10.1] to the Company’s [removed: Quarterly] [added: Current] Report on Form [removed: 10-Q] [added: 8-K] (File No. 1-08703) with the Securities and Exchange Commission on [removed: May 8, 2020)*] [added: June 17, 2022)*] | | |

| [removed: [10.2](https://www.sec.gov/Archives/edgar/data/0000106040/000010604021000024/wdc-2021q3ex101.htm)] [added: [10.2](https://www.sec.gov/Archives/edgar/data/106040/000010604021000024/wdc-2021q3ex101.htm)] | | | | | | Western Digital Corporation Executive Short-Term Incentive Plan (supersedes the Western Digital Corporation Executive Short-Term Incentive Plan dated August 7, 2019), dated February 9, 2021 (Filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10‑Q (File No. 1-08703) with the Securities and Exchange Commission on May 6, 2021)* | | |

| [removed: [10.3](https://www.sec.gov/Archives/edgar/data/0000106040/000119312518320967/d642144dex102.htm)] [added: [10.4](https://www.sec.gov/Archives/edgar/data/106040/000119312518320967/d642144dex102.htm)] | | | | | | Western Digital Corporation Amended and Restated 2005 Employee Stock Purchase Plan, as amended August 2, 2018 (Filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K (File No. 1-08703) with the Securities and Exchange Commission on November 7, 2018)* | | |

| [removed: [10.4](https://www.sec.gov/Archives/edgar/data/106040/000119312516593317/d194750dex41.htm)] [added: [10.5](https://www.sec.gov/Archives/edgar/data/106040/000119312516593317/d194750dex41.htm)] | | | | | | SanDisk Corporation 2013 Incentive Plan (Filed as Exhibit 4.1 to the Company’s Registration Statement on Form S-8 (File No. 333-211420) with the Securities and Exchange Commission on May 17, 2016)* | | |

| [removed: [10.5](https://www.sec.gov/Archives/edgar/data/106040/000119312512449441/d419625dex104.htm)] [added: [10.6](https://www.sec.gov/Archives/edgar/data/106040/000119312512449441/d419625dex104.htm)] | | | | | | Amended and Restated Deferred Compensation Plan, amended and restated effective January 1, 2013 (Filed as Exhibit 10.4 to the Company’s [removed: Annual] [added: Quarterly] Report on Form 10-Q (File No. 1-08703) with the Securities and Exchange Commission on November 2, 2012)* | | |

| [removed: [10.6](https://www.sec.gov/Archives/edgar/data/106040/000010604021000040/wdc-2021q4ex106.htm)] [added: [10.7](https://www.sec.gov/Archives/edgar/data/0000106040/000010604021000040/wdc-2021q4ex106.htm)] | | | | | | Western Digital Corporation Amended and Restated Change in Control Severance Plan, amended and restated as of May 24, [removed: 2021*†] [added: 2021 (Filed as Exhibit 10.6 to the Company’s Annual Report on Form 10-K (File No. 1-08703) with the Securities and Exchange Commission on August 27, 2021)*] | | |

| [removed: [10.7](https://www.sec.gov/Archives/edgar/data/106040/000010604021000040/wdc-2021q4ex107.htm)] [added: [10.8](https://www.sec.gov/Archives/edgar/data/0000106040/000010604021000040/wdc-2021q4ex107.htm)] | | | | | | Western Digital Corporation Amended and Restated Executive Severance Plan, amended and restated as of May 24, [removed: 2021*†] [added: 2021 (Filed as Exhibit 10.7 to the Company’s Annual Report on Form 10-K (File No. 1-08703) with the Securities and Exchange Commission on August 27, 2021)*] | | |

| [removed: [10.8](https://www.sec.gov/Archives/edgar/data/0000106040/000089256902002190/a85682exv10w4.txt)] [added: [10.9](https://www.sec.gov/Archives/edgar/data/106040/000089256902002190/a85682exv10w4.txt)] | | | | | | Form of Indemnity Agreement for Directors of Western Digital Corporation (Filed as Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q (File No. 1-08703) with the Securities and Exchange Commission on November 8, 2002)* | | |

| [removed: [10.9](https://www.sec.gov/Archives/edgar/data/0000106040/000089256902002190/a85682exv10w5.txt)] [added: [10.10](https://www.sec.gov/Archives/edgar/data/106040/000089256902002190/a85682exv10w5.txt)] | | | | | | Form of Indemnity Agreement for Officers of Western Digital Corporation (Filed as Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q (File No. 1-08703) with the Securities and Exchange Commission on November 8, 2002)* | | |

| [removed: [10.10](https://www.sec.gov/Archives/edgar/data/0000106040/000010604018000029/wdc-2018q4ex1010.htm)] [added: [10.11](https://www.sec.gov/Archives/edgar/data/106040/000010604018000029/wdc-2018q4ex1010.htm)] | | | | | | Form of Indemnification Agreement entered into between SanDisk Corporation and its directors and officers (Filed as Exhibit 10.10 to the Company’s Annual Report on Form 10-K (File No. 1-08703) with the Securities and Exchange Commission on August 24, 2018)* | | |

| [removed: [10.11](https://www.sec.gov/Archives/edgar/data/0000106040/000010604020000024/wdc-2020q3ex101.htm)] [added: [10.12](https://www.sec.gov/Archives/edgar/data/106040/000010604020000024/wdc-2020q3ex101.htm)] | | | | | | Offer Letter, dated as of February 18, 2020, to David Goeckeler (Filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q (File No. 1-08703) with the Securities and Exchange Commission on May 8, 2020)* | | |

| [removed: [10.12](https://www.sec.gov/Archives/edgar/data/106040/000010604020000061/wdc-2021q1ex101.htm)] [added: [10.13](https://www.sec.gov/Archives/edgar/data/106040/000010604020000061/wdc-2021q1ex101.htm)] | | | | | | Special Retention Agreement, dated as of August 26, 2019, with Michael C. Ray (Filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q (File No. 1-08703) with the Securities and Exchange Commission on November 6, 2020)* | | |

| [removed: [10.13](http://www.sec.gov/Archives/edgar/data/106040/000010604016000022/wdc-040116xexhibit104.htm)] [added: [10.16](https://www.sec.gov/Archives/edgar/data/106040/000010604022000040/wdc-2022q3ex102.htm)] | | | | | | [removed: Loan] [added: Restatement] Agreement, dated [removed: as of April 29, 2016,] [added: January 7, 2022,] by and among Western Digital Corporation, JPMorgan Chase [removed: Bank,] [added: Bank.] N.A., as administrative [removed: agent and collateral] agent, and the lenders [removed: and financial institutions from time to time] party thereto (Filed as Exhibit [removed: 10.4] [added: 10.2] to the Company’s Quarterly Report on Form 10-Q (File No. 1-08703) with the Securities and Exchange Commission on May [removed: 9, 2016)] [added: 4, 2022)*] | | |

| [removed: [10.13.1](http://www.sec.gov/Archives/edgar/data/106040/000119312516684785/d366731dex101.htm)] [added: [10.15](https://www.sec.gov/Archives/edgar/data/106040/000119312522169552/d314047dex101.htm)] | | | | | | [removed: Amendment No. 1, dated as of August 17, 2016, to the Loan Agreement dated as of April 29, 2016,] [added: Letter Agreement,] by and among Western Digital [removed: Corporation, JPMorgan Chase Bank, N.A., as administrative agent and collateral agent, the lenders party thereto] [added: Corporation] and [removed: the other loan parties thereto] [added: Elliott Investment Management L.P., dated June 7, 2022] (Filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No. 1-08703) with the Securities and Exchange Commission on [removed: August 18, 2016)] [added: June 8, 2022)] | | |

| [removed: [10.13.2](http://www.sec.gov/Archives/edgar/data/106040/000119312516717057/d174359dex101.htm)] [added: [10.3](https://www.sec.gov/Archives/edgar/data/106040/000119312521332703/d420765dex101.htm)] | | | | | | [removed: Amendment No. 2, dated as of September 22, 2016, to the Loan Agreement dated as of April 29, 2016, by and among] Western Digital [removed: Corporation, JPMorgan Chase Bank, N.A.,] [added: Corporation 2021 Long-Term Incentive Plan, adopted] as [removed: administrative agent and collateral agent, the lenders party thereto and the other loan parties thereto] [added: of August 18, 2021] (Filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No. 1-08703) with the Securities and Exchange Commission on [removed: September 22, 2016)] [added: November 18, 2021)*] | | |

| [removed: [10.13.5](https://www.sec.gov/Archives/edgar/data/0000106040/000119312517337353/d490541dex101.htm)] [added: [4.5](https://www.sec.gov/Archives/edgar/data/0000106040/000119312521353971/d253588dex41.htm)] | | | | | | [removed: Amendment No. 5, dated as of November 8, 2017, to the Loan Agreement] [added: Indenture,] dated as of [removed: April 29, 2016, by and among] [added: December 10, 2021, between] Western Digital [removed: Corporation, JPMorgan Chase Bank, N.A., as administrative agent and collateral agent, the lenders party thereto] [added: Corporation] and [removed: the other loan parties thereto] [added: U.S. Bank National Association, as trustee] (Filed as Exhibit [removed: 10.1] [added: 4.1] to the Company’s Current Report on Form 8-K (File No. 1-08703) with the Securities and Exchange Commission on [removed: November 8, 2017)] [added: December 10, 2021)] | | |

| [removed: [10.13.6](https://www.sec.gov/Archives/edgar/data/0000106040/000119312517355698/d498466dex101.htm)] [added: [4.4](https://www.sec.gov/Archives/edgar/data/0000106040/000119312522187239/d257590dex41.htm)] | | | | | | [removed: Amendment No. 6, dated as of November 29, 2017, to the Loan Agreement] [added: First Supplemental Indenture,] dated as of [removed: April 29, 2016,] [added: June 30, 2022,] by and [removed: among] [added: between] Western Digital [removed: Corporation, JPMorgan Chase Bank, N.A., as administrative agent and collateral agent, the lenders party thereto] [added: Corporation] and [removed: the other loan parties thereto] [added: U.S. Bank National Association, as trustee] (Filed as Exhibit [removed: 10.1] [added: 4.1] to the Company’s Current Report on Form 8-K (File No. 1-08703) with the Securities and Exchange Commission on [removed: November 29, 2017)] [added: July 1, 2022)] | | |