Western Digital (WDC) 10-K risk factor changes: FY2024 vs FY2023

Adverse changes in global or regional economic [added: and social] conditions, including, but not limited to, volatility in the financial markets, [removed: tighter] [added: reduced access to] credit, recession, inflation, rising interest rates, slower growth in certain geographic regions, political uncertainty, geopolitical tensions or conflicts, [added: terrorism,] other macroeconomic [removed: factors, changes to social conditions] [added: factors] and [added: new or changed] 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.

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, [added: terrorism,] public health [removed: emergencies,] [added: crises] or natural disasters.

We do not have long-term contracts with some of our existing suppliers, nor do we always have guaranteed manufacturing capacity with our suppliers, so we cannot guarantee that they will devote sufficient resources or capacity to manufacturing our [removed: products.]

We have cancelled or [removed: deferred] [added: deferred,] and may continue to cancel or [removed: defer] [added: defer,] outstanding purchase commitments with certain suppliers due to changes in actual and forecasted demand, which has resulted, and may continue to result in fees, penalties and other associated charges.

Our suppliers may be acquired by our competitors, decide to exit the [removed: industry,] [added: industry] or redirect their investments and increase costs to us.

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

[removed: The COVID-19 pandemic has] [added: Public health crises have in the past] negatively [removed: impacted] [added: impacted,] and [removed: future public health crises, including resurgences of COVID-19] may [added: in the future] negatively [removed: impact] [added: impact,] our workforce and [removed: operations in the future,] [added: operations,] as well as those of our strategic partners, customers, suppliers and logistics providers.

The degree to which any future public health [removed: crises, including resurgences of COVID-19,] [added: crises] ultimately impact our business will depend on many factors beyond our control, which are highly uncertain and cannot be predicted at this time.

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

Changes in our key management team [removed: can] [added: may] result in loss of continuity, loss of accumulated knowledge, departure of other key employees, disruptions to our operations and inefficiency during transitional periods.

Global competition for skilled employees in the technology industry is intense, and our business success is increasingly dependent on our ability to attract, develop and retain top [removed: talent;] [added: talent,] implement succession plans for key management and staff and replace aging skilled employees.

Additionally, uncertainty about business realignment actions or the structure and organization of our business as a result of our ongoing [removed: strategic review] [added: separation of our HDD and Flash business units into two independent public companies] could negatively impact our ability to recruit and retain key staff and skilled employees.

The compromise, damage or interruption of our technology infrastructure, [added: information] systems or products by [removed: cyber] [added: cybersecurity] incidents, data security breaches, other security problems, design [removed: defects or] [added: defects, information] system failures [added: or other events] could have a material negative impact on our business.

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

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

[removed: Cyber] [added: Cybersecurity] incidents can be caused by ransomware, computer denial-of-service attacks, [removed: worms,] [added: worms] and other malicious software programs or other attacks, including the covert introduction of malware to computers and networks, and the use of techniques or processes that change frequently, may be disguised or difficult to detect, or are designed to remain dormant until a triggering event, and may continue undetected for an extended period of time.

[removed: Cyber] [added: Cybersecurity] incidents have in the past resulted from, and may in the future result from, social engineering or impersonation of authorized users, and may also result from 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.

In some instances, efforts to correct vulnerabilities or prevent incidents have in the [removed: past] [added: past,] and may in the [removed: future] [added: future,] reduce the functionality or performance of our [removed: computer] [added: information] systems and networks, which could negatively impact our business.

We believe malicious [removed: cyber] [added: cybersecurity] acts are increasing in number and that [removed: cyber] [added: cybersecurity] threat actors are increasingly organized and well-financed or supported by state actors, and are developing increasingly sophisticated systems and means to not only infiltrate [added: information] systems, but also to evade detection or to obscure their activities.

Geopolitical tensions or conflicts may create heightened risk of [removed: cyber] [added: cybersecurity] incidents.

Our products are also targets for malicious [removed: cyber] [added: cybersecurity] acts, including those products utilized in cloud-based environments as well as our cloud service offerings.

Our cloud services have in the past and may in the future be taken offline as a result of or in order to prevent or mitigate [removed: cyber] [added: cybersecurity] incidents.

While some of our products contain encryption or security algorithms to protect third-party content or user-generated data stored on our products, these products could still be hacked or the encryption schemes could be compromised, [removed: breached,] [added: breached] or circumvented by motivated and sophisticated [removed: attackers.][added: attackers, which could harm our business by exposing us to litigation and indemnification claims and hurting our reputation.]

[removed: If] [added: When] efforts to breach our infrastructure, [added: information] systems or products are successful or we are unable to protect against [removed: these risks,] [added: such attacks,] we [added: have in the past suffered, and] could [removed: suffer] [added: in the future suffer,] interruptions, [removed: delays,] [added: delays] or cessation of operations of our [added: information] systems, and loss or misuse of proprietary or confidential information, IP, or sensitive or personal information.

Compromises of our infrastructure, [added: information] systems or products could also cause our customers and other affected third parties to suffer loss or misuse of proprietary or confidential information, IP, or sensitive or personal information, and could harm our relationships [removed: with customers and other third parties and subject us to liability.]

As a result of actual or perceived [removed: breaches,] [added: cybersecurity incidents or other information system disruptions,] we have in the past experienced and may in the future experience additional costs, notification requirements, civil and administrative fines and penalties, indemnification claims, [removed: litigation,] [added: litigation] or damage to our brand and reputation.

We are subject to risks related to product defects, which could result in product recalls or epidemic failures and could subject us to [removed: warranty claims in excess of our warranty provisions or which are greater than anticipated,] [added: warranty,] litigation or indemnification [removed: claims.][added: claims that exceed our expectations or estimates.]

[removed: We depend on Flash Ventures for the] development and manufacture of flash-based memory.

Substantially all of our flash-based memory is [removed: supplied by] [added: obtained from] Flash Ventures, which limits our ability to respond to market demand and supply changes and makes our financial results particularly susceptible to variations from our forecasts and expectations.

[removed: A] [added: As a result, a] failure to accurately forecast supply and demand could cause us to over-invest or under-invest in [added: inventory,] technology transitions or the expansion of Flash Ventures’ capacity.

Over-investment by us or our competitors [removed: could] [added: can] result in excess [removed: supply, which could cause] [added: supply and lead to] significant decreases in our product prices, significant excess, obsolete inventory or inventory write-downs or underutilization charges, and the potential impairment of our investments in Flash Ventures.

[removed: We] [added: For example, we] are contractually obligated to pay for 50% of the fixed costs of Flash Ventures regardless of whether we order any flash-based memory, and our orders placed with Flash Ventures on a three-month rolling basis are binding.

[removed: For example,] [added: Additionally,] under the Flash Ventures agreements, we cannot unilaterally direct most of Flash Ventures’ activities, and we have limited ability to source or fabricate flash outside of Flash Ventures.

Continued availability of lease financings for Flash Ventures is not guaranteed and could be limited by several factors, including [added: availability of tools qualified for leasing,] investor capacity and risk allocation policies, our or Kioxia’s financial performance and changes to our or Kioxia’s [added: business, ownership or corporate structure.]

[removed: -] [added: structural] changes [added: to or termination of the strategic partnership; and changes] in tax or regulatory [removed: requirements] [added: requirements, which] may necessitate changes to the agreements governing our strategic partnerships.

Demand for and prices of our products are influenced by, among other factors, [added: the] actual and projected [added: growth of] data [removed: growth,] [added: to be stored,] the balance between supply and demand in the storage market, including the effects of new fab capacity, macroeconomic factors, business conditions, [added: the emergence or growth of new or existing technologies (including AI),] technology transitions and other actions taken by us or our competitors.

The storage market has recently experienced, and may continue to experience, periods of excess capacity leading to liquidation of excess inventories, inventory write-downs, significant reductions in ASPs and negative impacts on our revenue and gross [removed: margins,] [added: margins] and volatile product life cycles that harm our ability to recover the cost of product development.

We [added: have faced declining gross margins in the past, and may] face potential gross margin pressures [added: in the future,] resulting from our ASPs declining more rapidly than our cost of revenue.

If we fail to adapt to or implement new [removed: technologies or] [added: technologies, if we fail to quickly and cost-effectively] develop new products [added: that meet the specifications and requirements intended or] desired by our customers [removed: quickly and cost-effectively,] or if technology transitions negatively impact our existing product roadmaps, our business may be harmed.

[removed: In addition, if our customers choose to delay transition to new technologies, if demand for the products that we develop is lower than expected or if the supporting] technologies to implement these new technologies are not available, we may be unable to achieve the cost structure required to support our profit objectives or may be unable to grow or maintain our market position.

We are also subject to risks that could harm our business associated with our global manufacturing operations, global sales efforts and our utilization of contract manufacturers, including: the need to obtain governmental approvals and compliance with evolving foreign regulations; the need to comply with regulations on international business, including the Foreign Corrupt Practices Act, the United Kingdom Bribery Act 2010, the anti-bribery laws of other countries and rules regarding conflict minerals; exchange, currency and tax controls and reallocations; weaker protection of IP rights; policies and financial incentives by governments in China, the United States, and countries in Europe and Asia designed to reduce dependence on foreign semiconductor manufacturing capabilities; trade restrictions, such as export controls, export bans, import restrictions, embargoes, sanctions, license and certification requirements (including semiconductor, encryption and other technology), tariffs and complex customs regulations; and difficulties in managing international operations, including appropriate internal controls.

products.

The effects of public health crises are uncertain and difficult to predict, but may also include disruptions to our supply chain, our operations or those of our strategic partners, customers or suppliers; deterioration of worldwide credit markets, which may limit our ability or increase our cost to obtain external financing and result in a higher rate of losses on our accounts receivable; volatility in financial markets, which may be extreme and could harm our ability to access the financial markets on acceptable terms or at all; increased data security and technology risks related to increased remote work; and reduced productivity or other disruptions of our operations.

We have and may continue to put retention arrangements in place for key employees to address the uncertainty about our business separation.

When these retention payments are earned, we may suffer further attrition.

These incidents have in the past caused, and may in the future cause, disruption to parts of our business operations and result in various investigation, recovery and remediation expenses.

We may also experience disruptions or outages of our information systems due to internal or third-party mistakes or technical errors, including due to software updates, which could disrupt our business operations.

with customers and other third parties and subject us to liability.

The proposed separation of our HDD and Flash business units into two independent public companies is subject to various risks and uncertainties and may not be completed in accordance with the expected plans or anticipated timeline, or at all.

On October 30, 2023, we announced that our Board of Directors had completed its review of potential strategic alternatives and had unanimously approved pursuing a plan to separate the Flash business unit from our remaining HDD business (the “Separation”).

The Separation is intended to be structured in a tax-free manner and we continue to drive towards completing the work required to separate the businesses by the end of calendar year 2024.

No assurance can be given as to whether the Separation will occur, when any such transaction will be approved or when any separation may be completed.

Furthermore, while we are working toward the Separation, the specific assets, liabilities and entities to be separated are still being finalized and may change.

We may determine to abandon any efforts with respect to the Separation at any time for any reason.

The form or other terms of the Separation may change over time, including with respect to the scope of the businesses to be separated or retained by us.

The final determination to separate is subject to Board approval, the execution of definitive documentation, receipt of opinions or rulings as to the tax-free nature of the Separation and satisfaction of customary conditions, including the effectiveness of appropriate filings with the SEC, the completion of audited financial statements and the availability of financing.

Additionally, no assurance can be given that the intended tax treatment will be achieved or that shareholders will not incur substantial tax liabilities in connection with the Separation.

The failure to satisfy any of these conditions could delay the completion of the Separation for a significant period of time or prevent it from occurring at all.

Various factors, including changes in the competitive conditions of our markets, changes in financial markets and economic conditions, failure to obtain any third party consents that may be required for the Separation, delays in obtaining tax opinions or rulings, material or unanticipated tax liability for our shareholders, us, and/or the Flash business unit, and other challenges in executing the separation of the two businesses, could delay or prevent the completion of the Separation or cause it to occur on terms or conditions that are different or less favorable than expected.

Further, our Board of Directors could decide, either because of a failure of conditions or because of market or other factors, to abandon the Separation.

Our review of the Separation has and will continue to involve significant time, expense and resources and could disrupt or adversely affect our business.

Executing the Separation has required and will continue to require significant time and attention from our senior management and employees and may divert their attention from operating and growing our business in ways that could adversely affect our business, financial condition and results of operations.

Our employees may also be distracted due to uncertainty about their future roles with the separated companies, and customers or suppliers could delay or defer decisions or may end their relationships with us.

In addition, we have incurred and will continue to incur expenses in connection with our strategic review and the consideration of the Separation and expect that the process of reviewing the Separation and executing the Separation, if any, will be time-consuming and involve significant additional costs and expenses, which may not yield a benefit if the Separation is not completed.

If pursued, we will also incur ongoing costs and dis-synergies in connection with, or as a result of, the Separation and related restructuring transactions, including costs of operating as independent, publicly traded companies that the two businesses will no longer be able to share.

Any of the above factors could cause the Separation (or the failure to execute the Separation) to have a material adverse effect on our business, financial condition, results of operations and the trading price of our common stock and/or other securities.

The Separation may not achieve the anticipated benefits and could expose us to new risks, including with respect to our existing indebtedness and future capital structure.

We may not realize any strategic, financial, operational or other benefits from the Separation.

We cannot predict with certainty if or when anticipated benefits will occur or the extent to which they will be achieved.

If the Separation is completed, our operational and financial profile (including our capital structure) will change and we will face new risks.

If the Separation is completed, we will be a smaller and less-diversified company and may be more vulnerable to changing market conditions.

While we believe that the Separation will position each company to better unlock its full standalone long-term potential, we cannot assure you that following the Separation we will be successful.

Further, there can be no assurance that the combined value of the shares of the two resulting companies will be equal to or greater than what the value of our common stock would have been had the Separation not occurred.

In addition, following the completion of the Separation or any other disposition of our Flash business unit, we will not be able to rely on the earnings, assets or cash flow of the Flash business unit, and that business will not provide funds to finance our working capital or other cash requirements.

As a result, our ability to service our debt may be adversely affected.

We cannot predict the prices at which our common stock may trade after the Separation or the effect of the Separation on the trading prices of our common stock.

The Separation will be subject to numerous conditions, including the availability of financing.

We have not obtained any financing with respect to the Separation transaction, including any new financing for the remaining business and the terms of any such arrangements may be more burdensome or costly than the terms of our current indebtedness or we may not be able to obtain credit on attractive terms and price.

Furthermore, the Separation may leave us with higher leverage and may also cause us to violate provisions of contracts or breach covenants in our existing indebtedness if such contracts or indebtedness are not replaced, repaid or refinanced or waivers are not obtained prior to the Separation.

For example, our credit facilities contain specific restrictions on any disposal of our Flash business unit.

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We are subject to risks associated with our global manufacturing operations and global sales efforts, as well as risks associated with our utilization of contract manufacturers, including:

- obtaining governmental approvals and compliance with evolving foreign regulations;

- the need to comply with regulations on international business, including the Foreign Corrupt Practices Act, the United Kingdom Bribery Act 2010, the anti-bribery laws of other countries and rules regarding conflict minerals;

- exchange, currency and tax controls and reallocations;

- weaker protection of IP rights;

- policies and financial incentives by governments in China, the United States, and countries in Europe and Asia designed to reduce dependence on foreign semiconductor manufacturing capabilities;

- trade restrictions, such as export controls, export bans, import restrictions, embargoes, sanctions, license and certification requirements (including semiconductor, encryption and other technology), tariffs and complex customs regulations; and

- difficulties in managing international operations, including appropriate internal controls.

As a result of these risks, our business could be harmed.

The effects of public health crises are uncertain and difficult to predict, but may include:

- Disruptions to our supply chain, our operations or those of our strategic partners, customers or suppliers caused by employees or others contracting infectious diseases, or by governmental orders to contain the spread of infectious disease, such as travel restrictions, quarantines, shelter in place orders, trade controls and business shutdowns;

- Deterioration of worldwide credit markets that may limit our ability or increase our cost to obtain external financing to fund our operations and capital expenditures and result in a higher rate of losses on our accounts receivables due to customer credit defaults;

- Extreme volatility in financial markets, which may harm our ability to access the financial markets on acceptable terms;

- Increased data security and technology risk as some employees 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 workers in our factories or our other worksites are exposed to or spread infectious diseases to other employees.

negatively affects any of these facilities, it would significantly affect our ability to manufacture or sell our products and source components and would harm our business.

For example, an unauthorized third party gained access to a number of our systems in March 2023, which caused disruption to parts of our business operations and resulted in various investigation, recovery, and remediation expenses.

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

To the extent our products include design defects, suffer system failure or are hacked, or if the encryption schemes are compromised or breached, this could harm our business by requiring us to employ additional resources to fix the errors or defects, exposing us to litigation and indemnification claims and hurting our reputation.

For example, as a result of a network security incident in March 2023, an unauthorized party obtained a copy of a Western Digital database used for our online store that contained some personal information of our online store customers.

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.

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 is time consuming and may be distracting and disruptive to our business operations and long-term planning, 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 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, volatility in the market price of our common stock and difficulty attracting and retaining qualified talent and business partners.

Similarly, 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.

business, ownership or corporate structure.

Our strategic relationships are subject to additional risks that could harm our business, including, but not limited to, the following:

- failure by our strategic partners to comply with applicable laws or employ effective internal controls;

- difficulties and delays in product and technology development at, ramping production at, and transferring technology to, our strategic partners;

- declining financial performance of our strategic partners, including failure by our strategic partners to timely fund capital investments with us or otherwise meet their commitments, including paying amounts owed to us or third parties when due;

- we may lose the rights to, or ability to 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;

- a bankruptcy event involving a strategic partner could result in structural changes to or termination of the strategic partnership; and

In addition, the success of our technology transitions and product development depends on a number of other factors, including:

- R&D expenses and results;

We are a leading developer, manufacturer, and provider of data storage devices based on both [added: HDD and] NAND flash [removed: and hard disk drive] technologies.

With [removed: dedicated flash-based products (“Flash”) and hard disk drives (“HDD”) business units] [added: a differentiated innovation engine] driving advancements in storage [added: and semiconductor] technologies, our broad and ever-expanding portfolio delivers powerful [removed: Flash and] HDD [added: and Flash] storage solutions for everyone from students, gamers, and home offices to the largest enterprises and public clouds to capture, preserve, access, and transform an ever-increasing diversity of data.

Our broad portfolio of technology and products [removed: address] [added: addresses] our multiple end markets: [removed: “Cloud”,] [added: “Cloud,”] “Client” and “Consumer”.

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

Fiscal years [added: 2024,] 2023, [removed: 2022,] and [removed: 2021,] [added: 2022,] which ended on June [added: 28, 2024, June] 30, 2023, [added: and] July 1, 2022, [removed: and July 2, 2021,] respectively, each comprised 52 weeks, with all quarters presented consisting of 13 weeks.

As disclosed in previous periods, we [removed: have] [added: had previously reached a final agreement with the Internal Revenue Service (“IRS”) and] received [removed: statutory] notices of deficiency [added: with respect to years 2008 through 2012] and [added: in February 2024, we also reached a final agreement for resolving the] notices of proposed adjustments [removed: from the Internal Revenue Service (“IRS”)] with respect to [removed: 2008] [added: years 2013] through 2015.

Additional information is provided in our discussion [removed: of Income tax expense] in our [removed: results] [added: “Results] of [removed: operations] [added: Operations – *Income Tax Expense,*” and the “Short- and Long-term Liquidity – *Unrecognized Tax Benefits*” section] below, [removed: as well as] [added: and] in Part II, Item 8, Note [removed: 14,] [added: 13,] *Income Tax Expense*, of the Notes to the Consolidated Financial [removed: Statements, and] [added: Statements] in [removed: the “Short- and Long-Term Liquidity \- Unrecognized Tax Benefits” section below.][added: this Annual Report on Form 10-K.]

[removed: In January 2023,] [added: During 2024,] we [removed: entered into] [added: drew and repaid $600 million principal amount (the “Delayed Draw Term Loan”) under] a [removed: new delayed draw term] loan [removed: agreement, which was then] [added: agreement we entered into in January 2023 and] amended in June 2023.

Additional information regarding our indebtedness, including the principal repayment terms, interest rates, covenants and other key terms of our outstanding indebtedness, and additional information on the terms of our convertible preferred shares is included in Part II, Item 8, Note [removed: 8, *Debt*, and Note 13, *Shareholders’ Equity and Convertible Preferred Stock*,] [added: 7, *Debt,*] of the Notes to Consolidated Financial Statements in this Annual Report on Form 10-K.

Macroeconomic factors such as inflation, higher interest rates and recession concerns [removed: have] [added: had] softened demand for our [removed: products,] [added: products in recent years,] with certain customers reducing purchases as they [removed: adjust] [added: adjusted] their production levels and [removed: right-size] [added: right-sized] their inventories.

As a result, we and our industry [removed: are experiencing] [added: experienced] a supply-demand imbalance, which [removed: has] resulted in reduced shipments and negatively impacted [removed: pricing, particularly in Flash.][added: pricing.]

[removed: This has] [added: In 2024 and 2023, these actions have] resulted in incremental charges for employee termination, asset impairment and other charges [removed: and manufacturing underutilization] [added: as well as] charges [added: for unabsorbed manufacturing overhead costs] in [removed: Flash and] HDD [removed: in 2023,] and [removed: is expected to impact near-term results.][added: Flash as a result of the underutilization of facilities as we temporarily scaled back production.]

*Summary Comparison of [removed: 2023, 2022] [added: 2024, 2023] and [removed: 2021*][added: 2022*]

| | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: 2023] [added: 2024] | | | | | | | | | | | | [removed: 2022] [added: 2023] | | | | | | | | | | | | | | | | | | [removed: 2021] [added: 2022] | | | | | | | | | | | | | | | | | | | | |

| Revenue, net | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | $ | [removed: 12,318] [added: 13,003] | | | | | 100.0 | | % | | | | $ | [removed: 18,793] [added: 12,318] | | | | | 100.0 | | % | | | | | | | | | | $ | [removed: 16,922] [added: 18,793] | | | | | 100.0 | | % |

| Cost of revenue | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: 10,431] [added: 10,058] | | | | | | [removed: 84.7] [added: 77.4] | | | | | | [removed: 12,919] [added: 10,431] | | | | | | [removed: 68.7] [added: 84.7] | | | | | | | | | | | | [removed: 12,401] [added: 12,919] | | | | | | [removed: 73.3] [added: 68.7] | | |

| Gross profit | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: 1,887] [added: 2,945] | | | | | | [removed: 15.3] [added: 22.6] | | | | | | [removed: 5,874] [added: 1,887] | | | | | | [removed: 31.3] [added: 15.3] | | | | | | | | | | | | [removed: 4,521] [added: 5,874] | | | | | | [removed: 26.7] [added: 31.3] | | |

| Research and development | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: 2,009] [added: 1,907] | | | | | | [removed: 16.3] [added: 14.7] | | | | | | [removed: 2,323] [added: 2,009] | | | | | | [removed: 12.4] [added: 16.3] | | | | | | | | | | | | [removed: 2,243] [added: 2,323] | | | | | | [removed: 13.3] [added: 12.4] | | |

| Selling, general and administrative | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: 970] [added: 828] | | | | | | [removed: 7.9] [added: 6.4] | | | | | | [removed: 1,117] [added: 970] | | | | | | [removed: 5.9] [added: 7.9] | | | | | | | | | | | | [removed: 1,105] [added: 1,117] | | | | | | [removed: 6.5] [added: 5.9] | | |

| Employee termination, asset impairment, and other [removed: charges] | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: 193] [added: 139] | | | | | | [removed: 1.6] [added: 1.1] | | | | | | [removed: 43] [added: 193] | | | | | | [removed: 0.2] [added: 1.6] | | | | | | | | | | | | [removed: (47)] [added: 43] | | | | | | [removed: (0.3)] [added: 0.2] | | |

| Total operating expenses | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: 3,172] [added: 3,262] | | | | | | [removed: 25.8] [added: 25.1] | | | | | | [removed: 3,483] [added: 3,172] | | | | | | [removed: 18.5] [added: 25.8] | | | | | | | | | | | | [removed: 3,301] [added: 3,483] | | | | | | [removed: 19.5] [added: 18.5] | | |

| Operating income (loss) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: (1,285)] [added: (317)] | | | | | | [removed: (10.4)] [added: (2.4)] | | | | | | [removed: 2,391] [added: (1,285)] | | | | | | [removed: 12.7] [added: (10.4)] | | | | | | | | | | | | [removed: 1,220] [added: 2,391] | | | | | | [removed: 7.2] [added: 12.7] | | |

| Interest income | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: 24] [added: 39] | | | | | | [removed: 0.2] [added: 0.3] | | | | | | [removed: 6] [added: 24] | | | | | | [removed: —] [added: 0.2] | | | | | | | | | | | | [removed: 7] [added: 6] | | | | | | — | | |

| Interest expense | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: (312)] [added: (417)] | | | | | | [removed: (2.5)] [added: (3.2)] | | | | | | [removed: (304)] [added: (312)] | | | | | | [removed: (1.6)] [added: (2.5)] | | | | | | | | | | | | [removed: (326)] [added: (304)] | | | | | | [removed: (1.9)] [added: (1.6)] | | |

| Other income, net | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: 13] [added: 34] | | | | | | [removed: 0.1] [added: 0.3] | | | | | | [removed: 30] [added: 23] | | | | | | 0.2 | | | | | | | | | | | | [removed: 26] [added: 78] | | | | | | [removed: 0.2] [added: 0.4] | | |

| Total interest and other income, net | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: (275)] [added: (344)] | | | | | | [removed: (2.2)] [added: (2.6)] | | | | | | [removed: (268)] [added: (265)] | | | | | | [removed: (1.4)] [added: (2.2)] | | | | | | | | | | | | [removed: (293)] [added: (220)] | | | | | | [removed: (1.7)] [added: (1.2)] | | |

| Less: cumulative dividends allocated to preferred shareholders | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: 24] [added: 54] | | | | | | [removed: 0.2] [added: 0.4] | | | | | | [removed: —] [added: 24] | | | | | | [removed: —] [added: 0.2] | | | | | | | | | | | | — | | | | | | — | | |

| | | | [removed: 2023] [added: 2024] | | | | | | [removed: 2022] [added: 2023] | | | | | | [removed: 2021] [added: 2022] | | |

| Flash | | | $ | [removed: 6,063] [added: 6,687] | | | | | $ | [removed: 9,753] [added: 6,063] | | | | | $ | [removed: 8,706] [added: 9,753] | |

| HDD | | | [removed: 6,255] [added: 6,316] | | | | | | [removed: 9,040] [added: 6,255] | | | | | | [removed: 8,216] [added: 9,040] | | |

| Total net revenue | | | $ | [removed: 12,318] [added: 13,003] | | | | | $ | [removed: 18,793] [added: 12,318] | | | | | $ | [removed: 16,922] [added: 18,793] | |

| Flash | | | $ | [removed: 433] [added: 1,079] | | | | | $ | [removed: 3,527] [added: 433] | | | | | $ | [removed: 2,611] [added: 3,527] | |

| HDD | | | [removed: 1,505] [added: 1,881] | | | | | | [removed: 2,661] [added: 1,505] | | | | | | [removed: 2,221] [added: 2,661] | | |

| Stock-based compensation expense | | | (49) | | | | | | [removed: (48)] [added: (49)] | | | | | | [removed: (55)] [added: (48)] | | |

| Amortization of acquired intangible assets | | | [removed: —] [added: (3)] | | | | | | [removed: (66)] [added: —] | | | | | | [removed: (331)] [added: (66)] | | |

| Contamination related charges | | | — | | | | | | [removed: (207)] [added: —] | | | | | | [removed: —] [added: (207)] | | |

| Recoveries from a power outage incident | | | — | | | | | | [removed: 7] [added: —] | | | | | | [removed: 75] [added: 7] | | |

| Other | | | [removed: (2)] [added: —] | | | | | | [removed: —] [added: (2)] | | | | | | — | | |

| Total unallocated corporate items | | | [removed: (51)] [added: (15)] | | | | | | [removed: (314)] [added: (51)] | | | | | | [removed: (311)] [added: (314)] | | |

| Consolidated gross profit | | | $ | [removed: 1,887] [added: 2,945] | | | | | $ | [removed: 5,874] [added: 1,887] | | | | | $ | [removed: 4,521] [added: 5,874] | |

Cloud is comprised primarily of products for public or private cloud environments and enterprise customers.

*Separation of Business Units*

On October 30, 2023, we announced that our Board of Directors had completed its strategic review of our business and, after evaluating a comprehensive range of alternatives, authorized us to pursue a plan to separate our HDD and Flash business units to create two independent, public companies.

We believe the separation will better position each business unit to execute innovative technology and product development, capitalize on unique growth opportunities, extend respective leadership positions, and operate more efficiently with distinct capital structures.

The completion of the planned separation is subject to certain conditions, including final approval by our Board of Directors.

Significant effort is underway and extensive progress has been made with respect to the separation as we continue to drive towards completing the work required to separate the businesses by the end of calendar year 2024.

To adapt to these conditions, since the beginning of 2023, we have been implementing measures to reduce operating expenses, and to proactively manage supply and inventory to align with demand and improve our capital efficiency while continuing to deploy innovative products.

These actions have enabled us to scale back on capital expenditures, consolidate production lines and reduce production bit growth.

In the latter half of 2024, we began to see an improvement in the supply and demand dynamic, leading to improved revenues.

The increased demand resulted in improved pricing and gross margin across our segments and end markets compared to 2023.

We anticipate that digital transformation, including AI data-cycle, will continue driving improved market conditions in the near- and long-term for data storage, encompassing both HDD and Flash technologies.

Leveraging our expertise and innovation in both areas, we believe we are well-positioned to capitalize on this improved market condition.

On November 3, 2023, we issued $1.60 billion aggregate principal amount of convertible senior notes, which bear interest at an annual rate of 3.00% and mature on November 15, 2028, unless earlier repurchased, redeemed or converted (the “2028 Convertible Notes”).

We received net proceeds of approximately $1.56 billion after issuance costs.

Contemporaneously with the issuance of the 2028 Convertible Notes, we entered into individually negotiated transactions with certain holders of our existing 1.50% convertible senior notes due February 1, 2024 (the “2024 Convertible Notes”) to repurchase approximately $508 million aggregate principal amount of such notes at an immaterial discount using net proceeds from the offering of the 2028 Convertible Notes.

In connection with the issuance of the 2028 Convertible Notes, we also used approximately $155 million of the net proceeds from the offering to pay the cost of entering into capped call contracts with a cap price of approximately $70.26 to hedge the potential dilution impact of the conversion feature.

On February 1, 2024, we used a portion of the remaining net proceeds from the offering of the 2028 Convertible Notes to settle the remaining 2024 Convertible Notes in accordance with their original terms for an aggregate cash principal payment of $592 million plus interest.

Proceeds from this loan were primarily used for payments on our tax liability to the IRS for the years 2008 through 2012.

*Agreement to Sell a Majority Interest in a Subsidiary*

In March 2024, our wholly-owned subsidiary, SanDisk China Limited (“SanDisk China”) entered into an Equity Purchase Agreement to sell 80% of its equity interest in SanDisk Semiconductor (Shanghai) Co. Ltd. (“SDSS”), our indirect wholly-owned subsidiary, to JCET Management Co., Ltd. (“JCET”), a wholly-owned subsidiary of JCET Group Co., Ltd., a Chinese publicly listed company, thereby forming a joint venture between SanDisk China and JCET (the “Transaction”).

Closing of the Transaction is subject to the satisfaction or waiver of certain conditions, after which JCET will own 80% of the equity interest in SDSS, with SanDisk China owning the remaining 20%.

Following the closing, we expect to enter into various ancillary agreements, including (i) a shareholders agreement governing the joint venture relationships from and after the closing; (ii) a supply agreement (“Supply Agreement”) with the joint venture to supply us with certain flash-based products currently produced by SDSS, which may include flash memory cards, embedded flash products, and flash components; and (iii) an intellectual property license agreement granting SDSS certain intellectual property rights on a royalty-free basis for use in manufacturing products on our behalf for the term of and pursuant to the Supply Agreement.

*Sale-Leaseback*

In September 2023, we completed a sale and leaseback of our facility in Milpitas, California.

We received net proceeds of $191 million in cash and recorded a gain of $85 million on the sale.

We are leasing back the facility at an annual lease rate of $16 million for the first year, increasing by 3% per year thereafter through January 1, 2039.

The lease includes three 5-year renewal options and one 4-year renewal option for the ability to extend through December 2057.

*Asset Impairment and Contract Termination Costs*

In connection with the cost-saving actions described in “*Operational Update*” above, we reassessed our existing capacity development plans and made decisions during 2024 to cancel certain projects, including projects to expand capacity in our Penang, Malaysia facility.

This resulted in a $146 million impairment of existing construction in progress and other assets and recognition of $34 million for certain contract termination costs during the year ended June 28, 2024.

| Litigation matter | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 291 | | | | | | 2.2 | | | | | | — | | | | | | — | | | | | | | | | | | | — | | | | | | — | | |

| Business separation costs | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 97 | | | | | | 0.7 | | | | | | — | | | | | | — | | | | | | | | | | | | — | | | | | | — | | |

| Income (loss) before taxes | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (661) | | | | | | (5.1) | | | | | | (1,550) | | | | | | (12.6) | | | | | | | | | | | | 2,171 | | | | | | 11.6 | | |

| Income tax expense | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 137 | | | | | | 1.1 | | | | | | 134 | | | | | | 1.1 | | | | | | | | | | | | 625 | | | | | | 3.3 | | |

| Net income (loss) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (798) | | | | | | (6.1) | | | | | | (1,684) | | | | | | (13.7) | | | | | | | | | | | | 1,546 | | | | | | 8.2 | | |

| Net income (loss) attributable to common shareholders | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | $ | (852) | | | | | (6.6) | | % | | | | $ | (1,708) | | | | | (13.9) | | % | | | | | | | | | | $ | 1,546 | | | | | 8.2 | | % |

| Recovery from contamination incident | | | 37 | | | | | | — | | | | | | — | | |

| Total revenue | | | | | | | | | | | | | | | $ | 13,003 | | | | | $ | 12,318 | | | | | $ | 18,793 | |

Net revenue increased 6% in 2024 compared to 2023, primarily due to increased exabytes sold, and improved supply-demand balance conditions in the second half of the year as described in the “Key Developments – *Operational Update*” section above and as discussed in more detail by business units below.

Flash revenue increased 10% in 2024 compared to 2023, primarily driven by a 21% increase in exabytes sold, partially offset by an 8% decline in ASPs per gigabyte.

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

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.

*Network Security Incident*

As previously disclosed, on March 26, 2023, we identified a network security incident in which an unauthorized third party gained access to a number of our systems.

Upon discovery of the incident, we implemented incident response efforts, which included taking various systems and services offline as a proactive measure to secure our business operations and initiating an investigation with the assistance of leading outside security and forensic experts.

In collaboration with outside forensic experts, we confirmed that an unauthorized party obtained a copy of a Western Digital database used for our online store that contained some personal information of our online store customers.

This information included customer names, billing and shipping addresses, email addresses and telephone numbers.

In addition, the database contained, in encrypted format, hashed and salted passwords and partial credit card numbers.

We have provided notifications to impacted customers and relevant governmental authorities.

The incident, together with the incident response efforts discussed above, resulted in some disruptions to our business operations, including manufacturing, sales, fulfillment and general corporate activities.

We were able to stabilize core operations after a short period of time and brought impacted systems back online in order of operational priority.

The incident did not have a material impact on the financial results in 2023.

Investigation, recovery, and remediation expenses, including costs for forensics activities, third-party consulting and service providers, outside legal advisors, and other IT professionals, as a result of the network security incident were not material to the Consolidated Financial Statements.

We maintain cyber insurance, subject to certain deductibles and policy limitations, typical for our size and industry.

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*Strategic Alternatives*

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.

As of June 30, 2023, we are still actively working with financial advisors and our legal counsel in this strategic review process.

During the third quarter of 2023, we and the IRS reached an agreement on the federal tax and interest calculations with respect to the years 2008 through 2012 and a tentative settlement for the years 2013 through 2015.

In December 2022 and in June 2023, we amended the loan agreement governing our Term Loan A-2 and revolving credit facility to provide additional financial flexibility as we navigate through the current dynamic economic environment.

The amendments modified our financial covenant requirements, including modifying the leverage ratio requirements, and introducing a minimum liquidity covenant applicable through the quarter ending September 27, 2024 and a minimum free cash flow requirement applicable through the quarter ending December 29, 2023.

The amendment also accelerates the due date for amounts outstanding under the loan agreement from January 7, 2027 to November 2, 2023 if, as of that date, our cash and cash equivalents plus available unused capacity under our credit facilities do not exceed by $1.40 billion the sum of the outstanding balance of our 1.50% convertible notes due 2024 plus the outstanding principal amount of any other debt maturing within twelve months.

As amended, the agreement allowed us to draw a loan of up to $600 million which we exercised in full in August 2023 (the “Delayed Draw Term Loan”).

Borrowings on this loan will mature on June 28, 2024 or such earlier date that conditions for acceleration of amounts due under the loan agreement governing our Term Loan A-2 and revolving credit facility have been triggered as described above.

Also in January, 2023, we issued an aggregate of 900,000 shares of Series A Preferred Stock for an aggregate purchase price of $900 million.

We believe these transactions will provide us with greater financial flexibility to manage our business.

While supply-demand imbalance has somewhat stabilized beginning in the third quarter of 2023, particularly in Client and Consumer, we continue to face a dynamic market environment.

To adapt to these conditions, since the beginning of 2023, we have scaled back on capital expenditures, consolidated production lines and reduced bit growth to align with market demand and implemented measures to reduce operating expenses.

However, we believe digital transformation will continue to drive long-term growth for data storage in both Flash and HDD and believe that the actions we are taking will position us to capitalize on market conditions when they improve to address long-term growth opportunities in data storage across all our end markets.

We will continue to actively monitor developments impacting our business and may take additional responsive actions that we determine to be in the best interest of our business and stakeholders.

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

Our new industry-leading 22-terabyte conventional magnetic recording drives and 26-terabyte shingled magnetic recording drives, utilizing OptiNAND technology, have commenced commercial shipments.

We also have commenced product sampling of our latest 28-terabyte Ultra SMR drive, which built upon proven ePMR and UltraSMR technology, with full feature and performance compatibility, as well as the reliability trusted by our customers worldwide.

During 2023, we announced BiCS8 node, the newest 3D-flash memory technology based on a chip-bonded-to-array architecture.

| Income (loss) before taxes | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (1,560) | | | | | | (12.7) | | | | | | 2,123 | | | | | | 11.3 | | | | | | | | | | | | 927 | | | | | | 5.5 | | |

| Income tax expense | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 146 | | | | | | 1.2 | | | | | | 623 | | | | | | 3.3 | | | | | | | | | | | | 106 | | | | | | 0.6 | | |

| Net income (loss) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (1,706) | | | | | | (13.8) | | | | | | 1,500 | | | | | | 8.0 | | | | | | | | | | | | 821 | | | | | | 4.9 | | |

| Net income (loss) attributable to common shareholders | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | $ | (1,730) | | | | | (14.0) | | % | | | | $ | 1,500 | | | | | 8.0 | | % | | | | | | | | | | $ | 821 | | | | | 4.9 | | % |

Net revenue decreased 34% in 2023 compared to 2022, primarily reflecting the supply-demand imbalance and macroeconomic pressures described in the “Operational Update” above.

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

[removed: Therefore, we] [added: We] have performed sensitivity analyses for [removed: 2023 and 2022,] [added: 2024,] 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 June [removed: 30, 2023 and July 1, 2022.][added: 28, 2024.]

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: $285 million and $306] [added: $248] million at June [removed: 30, 2023 and July 1, 2022, respectively.][added: 28, 2024.]

During [removed: 2023, 2022] [added: 2024, 2023] and [removed: 2021,] [added: 2022,] total net realized and unrealized transaction and foreign exchange contract currency gains and losses were not material to our Consolidated Financial Statements.

As of June [removed: 30, 2023,] [added: 28, 2024,] the outstanding balance on our Term Loan A-2 was [removed: $2.70] [added: $2.59] billion and a [removed: one percent] [added: 1%] increase in the variable rate of interest would increase annual interest expense by [removed: $27] [added: $26] million.

[removed: For additional information regarding] [added: As of June 28, 2024,] our variable [removed: interest] rate [removed: debt, see Part II, Item 8,] [added: debt outstanding consisted of our Term Loan A-2, which is based on various index rates as discussed further in] Note [removed: 8,] [added: 7,] *Debt*, of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K.

Due to macroeconomic changes and volatility experienced in the foreign exchange market recently, we believe sensitivity analysis is more informative in representing the potential impact to the portfolio as a result of market movement.

As of June 30, 2023, 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%.

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[removed: We are] [added: Western Digital is] a leading developer, [removed: manufacturer,] [added: manufacturer] and provider of data storage devices and solutions based on both [removed: NAND flash and] hard disk drive [added: and NAND flash] technologies.

With [removed: dedicated flash-based products (“Flash”) and hard disk drives (“HDD”) business units] [added: a differentiated innovation engine] driving advancements in storage [added: and semiconductor] technologies, our broad and ever-expanding portfolio delivers powerful [removed: Flash] [added: hard disk drives (“HDD”)] and [removed: HDD] [added: flash-based products (“Flash”)] storage solutions for everyone from students, [removed: gamers,] [added: gamers] and home offices, to the largest enterprises and public clouds to capture, preserve, [removed: access,] [added: access] and transform an ever-increasing diversity of data.

Our broad portfolio of technology and products [removed: in Flash and HDD address] [added: addresses] multiple end [removed: markets of “Cloud”,] [added: markets: “Cloud,”] “Client” and “Consumer.”

Cloud is comprised primarily of products for public or private cloud environments and end [removed: customers, which we believe we are uniquely positioned to address as the only provider of both Flash and HDD.][added: customers.]

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

We have [added: extensive customer, partner and channel relationships across] a [added: number of end markets and geography and have a] rich heritage of innovation and operational excellence, a wide range of intellectual property (“IP”) assets, broad research and development (“R&D”) [removed: capabilities,] [added: capabilities] and large-scale, efficient manufacturing supply chains.

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

We enable cloud, [removed: Internet,] [added: Internet] and social media infrastructure players to build more powerful, cost-effective and efficient data centers.

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

[removed: There] [added: We believe 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 increase in computing complexity and advancements in artificial [removed: intelligence,] [added: intelligence (“AI”),] along with growth in cloud computing applications, connected mobile devices and Internet-connected [removed: products,] [added: products] and edge devices is driving unabated growth in the volume of digital content to be stored and used.

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

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

We develop and manufacture solid state storage products for a variety of applications including enterprise or [removed: cloud storage, client storage,] [added: cloud, client,] automotive, mobile devices and removable memory devices.

Over time, we have successfully developed and commercialized successive generations of [removed: 3-dimensional] [added: multi-dimensional] flash technology with increased numbers of storage bits per cell in an increasingly smaller form factor, further driving cost reductions.

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

Our multi-year product roadmap for high-capacity HDD, which [removed: combine] [added: combines] 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 a strong position to capitalize on the opportunities presented by the large and growing storage markets.

Our broad portfolio of technology and products [removed: address] [added: addresses] multiple end markets of [removed: “Cloud”,] [added: “Cloud,”] “Client” and “Consumer” and are comprised of the Western Digital®, SanDisk® and WD® brands.

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

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

Our capacity enterprise hard [added: disk] drives provide high-capacity storage needs and a low total cost of ownership [removed: per gigabyte] for the growing cloud data center and smart video system markets.

Our high-performance enterprise class SSD include high-performance flash-based 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 online transactions, [added: AI-related workloads,] data analysis and other enterprise applications.

Through the Client end market, we provide numerous data solutions that we incorporate into our client’s devices, which consist of HDD and SSD desktop and notebook PCs, 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 [removed: Things,] [added: Things and] industrial and connected home applications.

[removed: The] [added: We serve the] Consumer end market [removed: provides consumers] with a portfolio of HDD and SSD embedded into external storage products and removable Flash, which include cards, universal serial bus (“USB”) flash drives and wireless drives, through our retail and channel routes to market.

[removed: We compete with] [added: Nevertheless, we face strong competition from other] manufacturers of [removed: Flash and] HDD [removed: for] [added: and Flash in the] Cloud, [removed: Client,] [added: Client] and Consumer end markets.

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

Our overall strategy [removed: is to leverage our innovation, technology] [added: focuses on leadership, innovation] and execution [removed: capabilities] to be an industry-leading and broad-based developer, manufacturer and provider of storage devices and solutions that support the infrastructure that has enabled the unabated proliferation of data.

For a discussion of [removed: associated] [added: such] risks, see Part I, Item 1A, *Risk Factors*, of this Annual Report on Form 10-K.

The critical elements of our production of [removed: Flash and] [added: both] HDD [added: and Flash] 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: Flash and] HDD [added: and Flash] manufacturing are [added: each] 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, Thailand; Penang, Johor Bahru, and Kuching, Malaysia; Laguna, Philippines; Shenzhen, China; [added: and] San Jose and Fremont, CA, USA.

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

[removed: While substantially] [added: Substantially] all of our flash memory supply utilized for our [added: flash-based] products is purchased from [removed: these ventures, from time to time, we also purchase flash memory from other flash manufacturers.][added: our joint ventures with Kioxia.]

[removed: While we do not unilaterally] [added: We jointly] control [added: with Kioxia] the operations of [removed: our ventures with Kioxia,] [added: Flash Ventures, and] we believe [removed: that] our [removed: business venture relationship with Kioxia] [added: participation in Flash Ventures] helps us reduce product costs, increases our ability to control the quality of our products and speeds delivery of our products to our customers.

Through Flash [removed: Partners Ltd., Flash Alliance Ltd., and Flash Forward Ltd., which we collectively refer to as Flash] Ventures, we and Kioxia collaborate in the development and manufacture of flash-based memory wafers using semiconductor manufacturing equipment owned or leased by each of the Flash [removed: Venture] [added: Ventures] entities.

We hold a 49.9% ownership position in each of the Flash [removed: Venture] [added: Ventures] entities.

We are obligated to [removed: take our share of the output from these ventures or] pay for variable costs incurred in producing our share of Flash Ventures’ flash-based memory wafer supply, based on [removed: our three-month forecast, which generally equals 50% of Flash Ventures’ output.][added: a rolling forecast.]

[removed: We] [added: In addition, we] are [removed: also] obligated to fund 49.9% to 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.

We co-develop flash technologies (including process technology and memory design) with Kioxia [removed: and contribute IP] for Flash Ventures’ use.

The agreements governing the operations of the Flash [removed: Venture] [added: Ventures] entities also set out a framework for any investment by the joint venture partners in flash manufacturing capacity.

On October 30, 2023, we announced that our Board of Directors had completed its strategic review of our business and, after evaluating a comprehensive range of alternatives, authorized us to pursue a plan to separate our HDD and Flash business units to create two independent, public companies.

We believe the separation will better position each business unit to execute innovative technology and product development, capitalize on unique growth opportunities, extend respective leadership positions and operate more efficiently with distinct capital structures.

The completion of the planned separation is subject to certain conditions, including final approval by our Board of Directors.

Significant effort is underway and extensive progress has been made with respect to the separation as we continue to drive towards completing the work required to separate the businesses by the end of calendar year 2024.

We have valuable patent portfolios containing approximately 13,000 active patents, covering groundbreaking memory technologies and beyond.

We believe we are well-positioned with our leading product portfolio, premium consumer brand, differentiated semiconductor innovation engine and leadership in driving cost efficiency.

Our strategy reflects the following foundational elements that we strive to meet:

*•Drive Leadership in HDD*

▪Provide reliable capacity growth and improved total cost of ownership

▪Enhance customers’ ability to generate value from data

▪Develop new technologies across the storage landscape

*•Drive Differentiated Leadership in Flash*

▪Capitalize on market transition to solid state drives

▪Focus on gross margin leadership

▪Leverage consumer brand strength

*•Lead in Storage Innovation*

▪Lead in areal density

▪Invest in leading HDD technologies to enable future drive capacity transition

▪Drive capital-efficient bit growth in flash

▪Explore tailored storage solutions to address the evolving workload requirements of generative AI

*•Deliver Customer Value*

▪Increase long-term engagement and through-cycle agreements with key hyperscalers

▪Maintain and expand strategic relationships with customers while transitioning into two market-leading companies

*•Accelerate Operational Excellence*

▪Achieve operational excellence to translate technology into stockholder value

▪Meet cost reduction targets to improve gross margin

▪Focus on sustainability and digital innovation of our manufacturing processes

Manufacturing and Suppliers

For more information on our agreement to sell a majority interest in one of our manufacturing facilities, see Part II, Item 7, *Management’s Discussion and Analysis of Financial Condition and Results of Operations* – *Key Developments*.

From time to time, we also purchase flash memory from other flash manufacturers.

We and Kioxia currently operate three business ventures, Flash Partners Ltd., Flash Alliance Ltd. and Flash Forward Ltd., (collectively “Flash Ventures”) across seven flash-based manufacturing facilities in Japan, six of which are located in Yokkaichi, Japan and one of which is located in Kitakami, Japan.

Flash Ventures will begin flash-based manufacturing operations at an eighth facility in Japan in calendar year 2025.

Kioxia owns the facilities and provides wafer manufacturing services to Flash Ventures at cost using manufacturing equipment owned or leased by Flash Ventures and process technologies co-owned or contributed by us and Kioxia.

We and Kioxia are entitled to purchase a share of Flash Ventures’ output, which generally equals 50% each.

The price for which we and Kioxia pay Flash Ventures for flash memory wafers is cost plus a small markup.

Our People

Our people strategy supports our purpose of being the world’s iconic data storage company through thoughtful offerings and inclusive practices that aim to attract, develop and engage talent.

*Inclusion*

In support of creating an inclusive environment, we also launched unconscious bias education to all professional and technical employees in 2024.

We have multiple initiatives that focus on attracting talent and fostering our diverse representation across our global workforce, including diversity in personal characteristics, experience, skills, gender, race, ethnicity and membership in underrepresented communities.

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

We have one of the technology industry’s most valuable patent portfolios with approximately 13,000 active patents worldwide.

The value and urgency of data storage at every point across this architecture have never been clearer.

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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 Flash and HDD technologies.

We strive to successfully execute our strategy through the following foundational elements in order to 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 Flash and HDD to deliver timely new products and solutions to meet growing demands for scale, performance and cost efficiency in the market.

- *Broad Product Portfolio:* We leverage our capabilities in firmware, software and systems in both Flash and 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.

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

Our strategy provides the following benefits, which distinguish us in the dynamic and competitive data storage industry:

- a broad product portfolio that differentiates us as a leading developer and manufacturer of integrated products and solutions based on both Flash and 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 Flash and HDD R&D and capital expenditures to deliver innovative and cost-effective storage solutions to multiple markets;

- deep relationships with industry leaders across the data ecosystems that give us the broadest routes to market; and

- industry leading consumer brand awareness and global retail distribution presence.

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.

Manufacturing

For example, we have taken 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.

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

We and Kioxia currently operate three business ventures in 300-millimeter flash-based manufacturing facilities in Japan, which provide us leading-edge, cost-competitive flash-based memory wafers for our end products.

Each Flash Venture entity purchases wafers from Kioxia at cost and then resells those wafers to us and Kioxia at cost plus a small markup.

Since its inception, Flash Ventures’ primary manufacturing site has been located in Yokkaichi, Japan.

The Yokkaichi site, which is owned and operated by Kioxia, currently includes six wafer fabrication facilities.

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

In January 2022, we entered into agreements regarding Flash Ventures’ investment in a new wafer fabrication facility in Yokkaichi, Japan, referred to as “Y7”, which is 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 now complete and has commenced output.

Materials and Supplies

Substantially all of our flash-based memory is supplied by our business ventures with Kioxia.

Human Capital Management

In order to support our company’s strategy, a continued emphasis on talent is required.

Despite the current industry headwinds, we continue to focus on attracting, developing, engaging and retaining the best talent for our company.

*Diversity, Equity and Inclusion*

We support inclusive hiring, training and development opportunities and ensuring equitable pay for employees, and we continue to focus on increasing diverse representation at every level of our company.

We have a number of initiatives that focus on increasing our diverse representation, including our new college graduate recruitment and hiring programs as well as veteran hiring and training programs.

In 2023, we continued the self-identification initiative launched in the previous year by inviting new hires 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.

We believe in the importance of investing in our people, and we do that through a robust Total Rewards program.

In 2023, we expanded our assessment to cover 100% of our employee population globally.

See Part II, Item 8, Note 17, *Legal Proceedings* and Note 13, *Income Tax Expense* of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K for disclosures regarding certain legal proceedings and the status of statutory notices of deficiency issued by the IRS with regards to tax years 2008 through 2015, respectively, which are incorporated by reference herein.

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 the fiscal year ended June [removed: 30, 2023][added: 28, 2024]

][added: logo.gif.gif](https://www.sec.gov/Archives/edgar/data/106040/000010604024000031/wdc-20240628_g1.gif)]

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to § 240.10D-1(b) [removed: ¨][added: ý]

The aggregate market value of the registrant’s common stock held by non-affiliates of the registrant on December [removed: 30, 2022,] [added: 29, 2023,] the last business day of the registrant’s most recently completed second fiscal quarter, was [removed: $7.73] [added: $12.90] billion, based on the closing sale price as reported on the Nasdaq Global Select Market.

There were [removed: 321,895,961] [added: 343,451,583] shares of common stock, par value $0.01 per share, outstanding as of the close of business on August [removed: 4, 2023.][added: 7, 2024.]

Part III incorporates by reference certain information from the registrant’s definitive proxy statement (the “Proxy Statement”) for the [removed: 2023] [added: 2024] Annual Meeting of Stockholders, which will be filed with the Securities and Exchange Commission within 120 days after the end of the [removed: 2023] [added: 2024] fiscal year.

| Item 1. | | | Business | | | [removed: [4](#i81392b4a1d0e495bb45df4a99b7c7393_19)] [added: [4](#ib2997730a43a454a9701e58b314f8f86_19)] | | |

| Item 1A. | | | Risk Factors | | | [removed: [11](#i81392b4a1d0e495bb45df4a99b7c7393_22)] [added: [12](#ib2997730a43a454a9701e58b314f8f86_22)] | | |

| Item 1B. | | | Unresolved Staff Comments | | | [removed: [26](#i81392b4a1d0e495bb45df4a99b7c7393_25)] [added: [27](#ib2997730a43a454a9701e58b314f8f86_25)] | | |

| Item 2. | | | Properties | | | [removed: [27](#i81392b4a1d0e495bb45df4a99b7c7393_28)] [added: [29](#ib2997730a43a454a9701e58b314f8f86_28)] | | |

| Item 3. | | | Legal Proceedings | | | [removed: [29](#i81392b4a1d0e495bb45df4a99b7c7393_34)] [added: [31](#ib2997730a43a454a9701e58b314f8f86_34)] | | |

| Item 4. | | | Mine Safety Disclosures | | | [removed: [29](#i81392b4a1d0e495bb45df4a99b7c7393_34)] [added: [31](#ib2997730a43a454a9701e58b314f8f86_34)] | | |

| Item 5. | | | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | | | [removed: [30](#i81392b4a1d0e495bb45df4a99b7c7393_43)] [added: [32](#ib2997730a43a454a9701e58b314f8f86_43)] | | |

| Item 6. | | | \[Reserved\] | | | [removed: [32](#i81392b4a1d0e495bb45df4a99b7c7393_49)] [added: [33](#ib2997730a43a454a9701e58b314f8f86_49)] | | |

| Item 7. | | | Management’s Discussion and Analysis of Financial Condition and Results of Operations | | | [removed: [33](#i81392b4a1d0e495bb45df4a99b7c7393_52)] [added: [34](#ib2997730a43a454a9701e58b314f8f86_52)] | | |

| Item 7A. | | | Quantitative and Qualitative Disclosures About Market Risk | | | [removed: [48](#i81392b4a1d0e495bb45df4a99b7c7393_88)] [added: [50](#ib2997730a43a454a9701e58b314f8f86_88)] | | |

| Item 8. | | | Financial Statements and Supplementary Data | | | [removed: [49](#i81392b4a1d0e495bb45df4a99b7c7393_94)] [added: [51](#ib2997730a43a454a9701e58b314f8f86_94)] | | |

| Item 9. | | | Changes in and Disagreements With Accountants on Accounting and Financial Disclosure | | | [removed: [107](#i81392b4a1d0e495bb45df4a99b7c7393_211)] [added: [110](#ib2997730a43a454a9701e58b314f8f86_211)] | | |

| Item 9A. | | | Controls and Procedures | | | [removed: [107](#i81392b4a1d0e495bb45df4a99b7c7393_214)] [added: [110](#ib2997730a43a454a9701e58b314f8f86_214)] | | |

| Item 9B. | | | Other Information | | | [removed: [108](#i81392b4a1d0e495bb45df4a99b7c7393_217)] [added: [111](#ib2997730a43a454a9701e58b314f8f86_217)] | | |

| Item 9C. | | | Disclosure Regarding Foreign Jurisdictions that Prevent Inspections | | | [removed: [108](#i81392b4a1d0e495bb45df4a99b7c7393_220)] [added: [111](#ib2997730a43a454a9701e58b314f8f86_220)] | | |

| Item 10. | | | Directors, Executive Officers and Corporate Governance | | | [removed: [109](#i81392b4a1d0e495bb45df4a99b7c7393_226)] [added: [112](#ib2997730a43a454a9701e58b314f8f86_226)] | | |

| Item 11. | | | Executive Compensation | | | [removed: [109](#i81392b4a1d0e495bb45df4a99b7c7393_229)] [added: [112](#ib2997730a43a454a9701e58b314f8f86_229)] | | |

| Item 12. | | | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | | | [removed: [109](#i81392b4a1d0e495bb45df4a99b7c7393_232)] [added: [112](#ib2997730a43a454a9701e58b314f8f86_232)] | | |

| Item 13. | | | Certain Relationships and Related Transactions, and Director Independence | | | [removed: [109](#i81392b4a1d0e495bb45df4a99b7c7393_235)] [added: [112](#ib2997730a43a454a9701e58b314f8f86_235)] | | |

| Item 14. | | | Principal Accountant Fees and Services | | | [removed: [109](#i81392b4a1d0e495bb45df4a99b7c7393_238)] [added: [112](#ib2997730a43a454a9701e58b314f8f86_238)] | | |

| Item 15. | | | Exhibits and Financial Statement Schedules | | | [removed: [110](#i81392b4a1d0e495bb45df4a99b7c7393_244)] [added: [113](#ib2997730a43a454a9701e58b314f8f86_244)] | | |

| Item 16. | | | Form 10-K Summary | | | [removed: [115](#i81392b4a1d0e495bb45df4a99b7c7393_250)] [added: [117](#ib2997730a43a454a9701e58b314f8f86_250)] | | |

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

*•consumer trends and market [removed: conditions, market opportunities and our market position;*][added: conditions;*]

*•the [added: impact of the] global macroeconomic environment;*

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

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

*•expectations [removed: regarding capital expenditure plans] [added: related to our joint ventures] and [removed: investments,] [added: partnerships] including relating to our Flash Ventures joint venture with Kioxia Corporation [removed: (“Kioxia”) and sources of funding for related expenditures;*][added: (“Kioxia”);*]

[removed: - *expectations] [added: *•expectations] regarding our [added: tax resolutions,] effective tax rate and our unrecognized tax [removed: benefits; and*][added: benefits;*]

You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this [removed: document.][added: Report.]

| Item 1C. | | | Cybersecurity | | | [27](#ib2997730a43a454a9701e58b314f8f86_1099511630646) | | |

*•our expectations regarding our plan to separate our HDD and Flash business units;*

*•expectations regarding our future financial performance;*

*•expectations related to our agreed sale of a portion of our equity interest in SanDisk Semiconductor (Shanghai) Co. Ltd.;*

*•expectations regarding capital expenditure plans and investments;*

*•expectations regarding the merits of our position and our plans with respect to certain litigation matters; and*

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*•our market position and portfolio synergies;*

- *expectations regarding the impact of the network security incident;*

*•expectations regarding supply chain conditions and constraints;*

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*Risk Management and Strategy*

At Western Digital, our management team is charged with managing risk and bringing to our Board of Directors’ attention all material risk exposures to our company.

Our enterprise risk management (“ERM”) process is designed to facilitate the identification, assessment, management, reporting and monitoring of material risks our company may face over the short-term and long-term and assure regular communication with our Board of Directors and its committees regarding these risks.

Through our ERM process, we have determined that the compromise, damage or interruption of our technology infrastructure, information systems or products by cybersecurity incidents is a key risk to our company that may have a material negative impact on our business.

To help mitigate the potential impact of cybersecurity incidents on our business and protect against cybersecurity threats, we have established organizational structures, procedural measures and response plans that define roles and responsibilities related to cybersecurity risk management.

Western Digital’s Information Security organization addresses cybersecurity risks with a broad spectrum of technologies, controls, and processes that focus on mitigating these risks.

Our cybersecurity strategy is designed to be dynamic and adaptive to combat the rapidly-evolving cybersecurity threat landscape and is influenced by commonly leveraged frameworks such as the NIST-CSF (National Institute of Standard and Technologies – CyberSecurity Framework).

Our program includes, but is not limited to, advanced systems and network security protocols, electronic communications protections, vulnerability management programs, least-privilege access controls, third-party risk management procedures, workforce education and training exercises, and compliance programs.

Our dedicated 24x7 Security Operations Center incorporates specialized systems and processes for handling security incidents into its regular work and operates a robust, modern security infrastructure with appropriate security sensors and event monitoring capabilities.

Upon detection of a cybersecurity incident, the Security Operations Center determines the severity of the incident in accordance with a pre-established incident severity matrix, initiates the appropriate notification and escalation protocols and begins triage.

Predefined severity tiers serve as a guide to match our response to each incident’s determined severity or risk level.

Additionally, we have established a Cyber Incident Response Plan that follows the structure of the Incident Handling Guide published by the U.S. National Institute of Standards and Technology (SP 800-61r2) and that serves as an operational guide for handling cybersecurity incidents at Western Digital.

Our Cyber Incident Response Plan provides procedural and strategic guidance that is designed to be flexible enough to apply to a variety of different incidents, but also specific enough to provide guidelines for incident prevention, detection, analysis, escalation and notification, and containment, eradication and recovery.

As part of our ongoing information security program, Western Digital utilizes periodic independent third-party experts to conduct assessments of our program’s effectiveness.

These experts are also leveraged to design and orchestrate tabletop exercises where multiple business functions and leadership levels must navigate complex incident scenarios to help determine our level of preparedness for various cybersecurity incidents.

As part of our business operations, Western Digital engages with a number of third parties, including but not limited to, online software service providers, vendors, consultants, and partners.

Each of these third-parties must be cleared through a formal cybersecurity risk assessment process before being allowed to integrate with Western Digital’s information systems, access confidential data, or provide electronic services to members of our workforce.

Additionally, further scrutiny is applied during the post-assessment onboarding process in order to fine-tune access rights to limit privileges to those necessary to enable the related service, resulting in a least-privilege level of access.

Western Digital has in the past experienced cybersecurity incidents of varying degrees involving our technology infrastructure and information systems, including incidents in which unauthorized parties have obtained access to our information systems and networks.

While these incidents have at times resulted in some disruptions to our business operations, as of the date of this Annual Report on Form 10-K, we do not believe that known risks from cybersecurity threats, including as a result of any previous cybersecurity incident, have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations or financial condition.

However, we can give no assurance that we have detected or protected against all such cybersecurity incidents or threats or that we will not experience such an incident in the future.

Further details about the cybersecurity risks we face are described under “*The compromise, damage or interruption of our technology infrastructure, information systems or products by cybersecurity incidents, data security breaches, other security problems, design defects, information system failures or other events could have a material negative impact on our business”* in Part I, Item 1A, *Risk Factors,* of this Annual Report on Form 10-K.

*Governance*

Western Digital has implemented a governance framework related to cybersecurity that includes operational risk-mitigation practices and Board-level cybersecurity risk oversight.

Our management team is charged with managing cybersecurity risk and identifying material cybersecurity risk exposures to our company and carries out this function primarily through our Information Security organization, which is led by our Chief Information Security Officer who has a master’s degree in computer science, over a decade of information security leadership, and thirty years of combined IT leadership experience.

Additionally, our Cyber Incident Response Plan discussed above calls for the establishment of a management Impact Assessment Committee, which consists of key leadership representatives from the organization and is convened on an ad hoc basis to assess the detailed business impact of a cybersecurity incident.

The Impact Assessment Committee is led by our Chief Information Security Officer and includes key representatives from the Company’s functional groups, including human resources, ethics and compliance, labor, privacy, internal audit, finance, communications, legal, risk and accounting.

The Impact Assessment Committee receives updates and communications from the Security Operations Center on a fixed cadence determined by incident severity and follows our pre-established escalation framework to communicate with and include executive leadership, outside counsel and the Board of Directors, as appropriate.

The Impact Assessment Committee works with the Company’s internal and external legal counsel to determine and facilitate appropriate communications with the Board of Directors.

Our Board of Directors is responsible for overseeing the cybersecurity risk management process and exercises this risk oversight through both our full Board of Directors and its Audit Committee.

Our Board of Directors has delegated to the Audit Committee the responsibility to oversee risks related to cybersecurity threats, and our Audit Committee Charter requires the Audit Committee to review and discuss with management the Company’s policies with respect to risk assessment and enterprise risk management and to review the risk exposure of the Company related to the Committee’s areas of responsibility, including with respect to cybersecurity.

In carrying out this role, the Audit Committee meets with our Chief Information Security Officer regularly and receives at least quarterly reports on cybersecurity matters.

Additionally, at least annually, our Chief Audit Executive, who manages the day-to-day activities of our ERM program, reports to our Board of Directors on enterprise risk assessment under our ERM program, providing updates on key risks, status of mitigation efforts and residual risk trends, including an analysis of cybersecurity risks.

Also at least annually, our Chief Information Security Officer reports to the full Board of Directors on cybersecurity matters related to or impacting our company and our business.

Our leased facilities have contracts expiring at various times through [removed: 2034.][added: 2039.]

Our principal manufacturing, R&D, marketing and administrative facilities as of June [removed: 30, 2023] [added: 28, 2024] were as follows:

| Irvine | | | | | | Leased | | | | | | [removed: 458,000] [added: 408,000] | | | | | | HDD R&D, administrative, marketing and sales | | |

| Milpitas | | | | | | [removed: Owned] [added: Leased] | | | | | | 578,000 | | | | | | Flash R&D, marketing and sales, and administrative | | |

| Shanghai | | | | | | Owned | | | | | | [removed: 914,000] [added: 917,000] | | | | | | Flash assembly and test of SSD | | |

| Shenzhen | | | | | | Owned and Leased | | | | | | [removed: 563,000] [added: 614,000] | | | | | | HDD manufacturing of media [added: and sales] | | |

| Penang | | | | | | Owned | | | | | | [removed: 1,889,000] [added: 2,420,000] | | | | | | Assembly and test of SSD, manufacturing of media, and R&D for Flash and HDD | | |

| Bangalore | | | | | | Owned and Leased | | | | | | [removed: 1,260,000] [added: 1,317,000] | | | | | | Flash R&D and administrative | | |

We also lease office space in various other locations [removed: throughout the world] [added: worldwide] primarily for R&D, sales, operations, manufacturing, administration and technical support.

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

During the year ended June 28, 2024, we completed a sale and leaseback of our facility in Milpitas, California.

We believe our present facilities are adequate for our current needs.

In general, new manufacturing facilities can be developed and become operational within approximately 12 to 24 months should we require such additional facilities.

[Table of Content](#i81392b4a1d0e495bb45df4a99b7c7393_10)[s](#i81392b4a1d0e495bb45df4a99b7c7393_10)

[Table of Content](#i81392b4a1d0e495bb45df4a99b7c7393_10)[s](#i81392b4a1d0e495bb45df4a99b7c7393_10)

Our common stock is listed on the Nasdaq Global Select Market (“Nasdaq”) under the symbol [removed: “WDC.” The approximate number of holders of record of our common stock as of August 4, 2023 was 855.][added: “WDC”.]

[added: For more information about our dividends,] see Part II, Item 7, *Management’s Discussion and Analysis of Financial Condition and Results of Operations [removed: -] [added: –] 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 June [removed: 30, 2023.][added: 28, 2024.]

The graph assumes that $100 was invested in our common stock at the close of market on June [removed: 29, 2018] [added: 28, 2019] and that all dividends were reinvested.

(Assumes $100 investment at market close on June [removed: 29, 2018)][added: 28, 2019)]

[removed: ][added: ]

| | | | June [removed: 29, 2018 | | | | | | June] 28, 2019 | | | | | | July 3, 2020 | | | | | | July 2, 2021 | | | | | | July 1, 2022 | | | | | | June 30, 2023 | | | [added: | | | June 28, 2024 | | |]

| Dow Jones U.S. Technology Hardware & Equipment Index | | | $ | 100.00 | | | | | $ | [removed: 107.82] [added: 145.46] | | | | | $ | [removed: 156.84] [added: 224.80] | | | | | $ | [removed: 242.39] [added: 200.70] | | | | | $ | [removed: 216.40] [added: 300.76] | | | | | $ | [removed: 324.28] [added: 457.57] | |

The approximate number of holders of record of our common stock as of August 7, 2024 was 802.

| Western Digital Corporation | | | $ | 100.00 | | | | | $ | 89.25 | | | | | $ | 147.66 | | | | | $ | 91.31 | | | | | $ | 79.77 | | | | | $ | 159.35 | |

| S&P 500 Index | | | $ | 100.00 | | | | | $ | 107.51 | | | | | $ | 151.36 | | | | | $ | 135.29 | | | | | $ | 161.80 | | | | | $ | 201.53 | |

For more information about our dividend policy.

[Table of Content](#i81392b4a1d0e495bb45df4a99b7c7393_10)[s](#i81392b4a1d0e495bb45df4a99b7c7393_10)

| Western Digital Corporation | | | $ | 100.00 | | | | | $ | 64.19 | | | | | $ | 58.99 | | | | | $ | 97.59 | | | | | $ | 60.35 | | | | | $ | 52.72 | |

| S&P 500 Index | | | $ | 100.00 | | | | | $ | 110.42 | | | | | $ | 118.70 | | | | | $ | 167.13 | | | | | $ | 149.39 | | | | | $ | 178.66 | |

[Table of Content](#i81392b4a1d0e495bb45df4a99b7c7393_10)[s](#i81392b4a1d0e495bb45df4a99b7c7393_10)

| Report of Independent Registered Public Accounting Firm (Auditor Firm ID: 185) | | | [removed: [50](#i81392b4a1d0e495bb45df4a99b7c7393_97)] [added: [52](#ib2997730a43a454a9701e58b314f8f86_97)] | | |

| Consolidated Balance Sheets — As of June [added: 28, 2024 and June] 30, 2023 [removed: and July 1, 2022] | | | [removed: [53](#i81392b4a1d0e495bb45df4a99b7c7393_100)] [added: [54](#ib2997730a43a454a9701e58b314f8f86_100)] | | |

| Consolidated Statements of Operations — Three Years Ended June [removed: 30, 2023] [added: 28, 2024] | | | [removed: [54](#i81392b4a1d0e495bb45df4a99b7c7393_103)] [added: [55](#ib2997730a43a454a9701e58b314f8f86_103)] | | |

| Consolidated Statements of Comprehensive [removed: Income (Loss)] [added: Loss] — Three Years Ended June [removed: 30, 2023] [added: 28, 2024] | | | [removed: [55](#i81392b4a1d0e495bb45df4a99b7c7393_106)] [added: [56](#ib2997730a43a454a9701e58b314f8f86_106)] | | |

| Consolidated Statements of Cash Flows — Three Years Ended June [removed: 30, 2023] [added: 28, 2024] | | | [removed: [56](#i81392b4a1d0e495bb45df4a99b7c7393_109)] [added: [57](#ib2997730a43a454a9701e58b314f8f86_109)] | | |

| Consolidated Statements of Convertible Preferred Stock and Shareholders' Equity — Three Years Ended June [removed: 30, 2023] [added: 28, 2024] | | | [removed: [57](#i81392b4a1d0e495bb45df4a99b7c7393_112)] [added: [58](#ib2997730a43a454a9701e58b314f8f86_112)] | | |

[removed: | Notes to Consolidated Financial Statements | | | [58](#i81392b4a1d0e495bb45df4a99b7c7393_118) | | |][added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)]

We have audited the accompanying consolidated balance sheets of Western Digital Corporation and subsidiaries (the Company) as of June [removed: 30, 2023] [added: 28, 2024] and [removed: July 1, 2022,] [added: June 30, 2023,] the related consolidated statements of operations, comprehensive income (loss), cash flows, convertible preferred stock and shareholders’ equity for each of the years in the three-year period ended June [removed: 30, 2023,] [added: 28, 2024,] and the related notes (collectively, the consolidated financial statements).

We also have audited the Company’s internal control over financial reporting as of June [removed: 30, 2023,] [added: 28, 2024,] based on criteria established in Internal Control – Integrated 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 June [removed: 30, 2023] [added: 28, 2024] and [removed: July 1, 2022,] [added: June 30, 2023,] and the results of its operations and its cash flows for each of the years in the three-year period ended June [removed: 30, 2023,] [added: 28, 2024,] 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 June [removed: 30, 2023,] [added: 28, 2024] based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Item 9A *Controls and Procedures [removed: -] [added: –] Management's Report on Internal Control over Financial Reporting*.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally [added: accepted accounting principles.]

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

The critical audit [removed: matters] [added: matter] communicated below [removed: are matters] [added: is a matter] arising from the current period audit of the consolidated financial statements that [removed: were] [added: was] communicated or required to be communicated to the audit committee and that: (1) [removed: relate] [added: relates] 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 [added: a] critical audit [removed: matters] [added: matter] 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: matters] [added: matter] below, providing [added: a] separate [removed: opinions] [added: opinion] on the critical audit [removed: matters] [added: matter] or on the accounts or disclosures to which [removed: they relate.][added: it relates.]

[removed: *Goodwill Impairment Assessment of the] [added: The] Company’s [removed: Reporting Units*][added: assessment resulted in no impairment of goodwill in 2024, 2023 or 2022.]

| | | | [added: | | | | | | | | | | | |] June [added: 28, 2024 | | | | | | June] 30, 2023 | | | | | | July 1, 2022 | | |

| Cash and cash equivalents | | | $ | [removed: 2,023] [added: 1,879] | | | | | $ | [removed: 2,327] [added: 2,023] | |

| Accounts receivable, net | | | [removed: 1,598] [added: 2,166] | | | | | | [removed: 2,804] [added: 1,598] | | |

| Inventories | | | [removed: 3,698] [added: 3,342] | | | | | | [removed: 3,638] [added: 3,698] | | |

| Other current assets | | | [removed: 567] [added: 673] | | | | | | [removed: 684] [added: 567] | | |

| Total current assets | | | [removed: 7,886] [added: 8,060] | | | | | | [removed: 9,453] [added: 7,886] | | |

| Property, plant and equipment, net | | | [removed: 3,620] [added: 3,167] | | | | | | [removed: 3,670] [added: 3,620] | | |

| Notes receivable and investments in Flash Ventures | | | [removed: 1,297] [added: 991] | | | | | | [removed: 1,396] [added: 1,410] | | |

| Goodwill | | | [removed: 10,037] [added: 10,032] | | | | | | [removed: 10,041] [added: 10,037] | | |

| Other intangible assets, net | | | [removed: 80] [added: 78] | | | | | | [removed: 213] [added: 80] | | |

| Other non-current assets | | | [removed: 1,509] [added: 1,860] | | | | | | [removed: 1,486] [added: 1,513] | | |

| Accounts payable | | | $ | [removed: 1,293] [added: 1,411] | | | | | $ | [removed: 1,902] [added: 1,293] | |

| Accounts payable to related parties | | | [removed: 292] [added: 313] | | | | | | [removed: 320] [added: 292] | | |

| Accrued expenses | | | [removed: 1,288] [added: 1,480] | | | | | | [removed: 1,636] [added: 1,288] | | |

| Income taxes payable | | | [removed: 999] [added: 525] | | | | | | [removed: 869] [added: 999] | | |

| Accrued compensation | | | [removed: 349] [added: 608] | | | | | | [removed: 510] [added: 349] | | |

| Current portion of long-term debt | | | [removed: 1,213] [added: 1,750] | | | | | | [removed: —] [added: 1,213] | | |

| Total current liabilities | | | [removed: 5,434] [added: 6,087] | | | | | | [removed: 5,237] [added: 5,434] | | |

| Long-term debt | | | [removed: 5,857] [added: 5,684] | | | | | | [removed: 7,022] [added: 5,857] | | |

| Other liabilities | | | [removed: 1,415] [added: 1,370] | | | | | | [removed: 1,779] [added: 1,415] | | |

| Total liabilities | | | [removed: 12,706] [added: 13,141] | | | | | | [removed: 14,038] [added: 12,706] | | |

| Commitments and contingencies (Notes [added: 9,] 10, [removed: 11, 14] [added: 13] and 17) | | | | | | | | | | | |

| Convertible preferred stock, $0.01 par value; authorized — 5 shares; issued and outstanding — [removed: 1] [added: 0.2] shares in [removed: 2023] [added: 2024] and [removed: 0] [added: 0.9] shares in [removed: 2022;] [added: 2023;] aggregate liquidation preference of [removed: $933] [added: $257] and [removed: $0] [added: $924] as of June [removed: 30, 2023] [added: 28, 2024] and June 30, [removed: 2022,] [added: 2023,] respectively | | | [removed: 876] [added: 229] | | | | | | [removed: —] [added: 876] | | |

| Notes to Consolidated Financial Statements | | | [59](#ib2997730a43a454a9701e58b314f8f86_115) | | |

| Total assets | | | $ | 24,188 | | | | | $ | 24,546 | |

| Accumulated other comprehensive loss | | | (712) | | | | | | (548) | | |

| Retained earnings | | | 6,775 | | | | | | 7,573 | | |

| Litigation matter | | | | | | | | | | | | | | | 291 | | | | | | — | | | | | | — | | |

| Business separation costs | | | | | | | | | | | | | | | 97 | | | | | | — | | | | | | — | | |

| Total interest and other income, net | | | | | | | | | | | | | | | (344) | | | | | | (265) | | | | | | (220) | | |

| Income (loss) before taxes | | | | | | | | | | | | | | | (661) | | | | | | (1,550) | | | | | | 2,171 | | |

| Income tax expense | | | | | | | | | | | | | | | 137 | | | | | | 134 | | | | | | 625 | | |

| Net income (loss) | | | | | | | | | | | | | | | (798) | | | | | | (1,684) | | | | | | 1,546 | | |

| Net income (loss) attributable to common shareholders | | | | | | | | | | | | | | | $ | (852) | | | | | $ | (1,708) | | | | | $ | 1,546 | |

| Basic | | | | | | | | | | | | | | | $ | (2.61) | | | | | $ | (5.37) | | | | | $ | 4.96 | |

| Diluted | | | | | | | | | | | | | | | $ | (2.61) | | | | | $ | (5.37) | | | | | $ | 4.89 | |

| Net income (loss) | | | | | | | | | | | | | | | $ | (798) | | | | | $ | (1,684) | | | | | $ | 1,546 | |

| Foreign currency translation adjustment | | | | | | | | | | | | | | | (115) | | | | | | (88) | | | | | | (262) | | |

| Total other comprehensive gain (loss), before tax | | | | | | | | | | | | | | | (179) | | | | | | 62 | | | | | | (416) | | |

| Other comprehensive gain (loss), net of tax | | | | | | | | | | | | | | | (164) | | | | | | 31 | | | | | | (380) | | |

| Total comprehensive income (loss) | | | | | | | | | | | | | | | $ | (962) | | | | | $ | (1,653) | | | | | $ | 1,166 | |

| Net income (loss) | | | $ | (798) | | | | | $ | (1,684) | | | | | $ | 1,546 | |

| Deferred income taxes | | | (161) | | | | | | (48) | | | | | | 116 | | |

| Inventories | | | 356 | | | | | | (60) | | | | | | (22) | | |

| Other assets and liabilities, net | | | (342) | | | | | | (183) | | | | | | (349) | | |

| Purchase of capped calls | | | (155) | | | | | | — | | | | | | — | | |

| Repurchases of debt | | | (505) | | | | | | — | | | | | | — | | |

| Net loss | | | — | | | | | | — | | | | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (1,684) | | | | | | (1,684) | | |

| Net loss | | | — | | | | | | — | | | | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (798) | | | | | | (798) | | |

| Purchase of capped calls related to the issuance of convertible notes, net of tax | | | — | | | | | | — | | | | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (118) | | | | | | — | | | | | | — | | | | | | (118) | | |

| Conversion of convertible preferred stock | | | (0.7) | | | | | | (647) | | | | | | | | | 15 | | | | | | — | | | | | | — | | | | | | — | | | | | | 647 | | | | | | — | | | | | | — | | | | | | 647 | | |

| Foreign currency translation adjustment | | | — | | | | | | — | | | | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (116) | | | | | | — | | | | | | (116) | | |

| Balance at June 28, 2024 | | | 0.2 | | | | | | $ | 229 | | | | | | | | 343 | | | | | | $ | 3 | | | | | — | | | | | | $ | — | | | | | $ | 4,752 | | | | | $ | (712) | | | | | $ | 6,775 | | | | | $ | 10,818 | |

*Business Separation Costs*

On October 30, 2023, the Company announced that its Board of Directors had completed its strategic review of its business and, after evaluating a comprehensive range of alternatives, authorized the Company to pursue a plan to separate its HDD and Flash business units to create two independent, public companies.

As a result of the plan, the Company has incurred separation and transition costs and expects to incur such costs through the completion of the separation of the businesses.

The separation and transition costs are recorded within Business separation costs in the Consolidated Statements of Operations.

For the periods presented, the Company determined that it did not have any VIEs that are required to be consolidated.

*Revision of Previously Issued Financial Statements*

As previously disclosed in the Company’s Quarterly Reports on Form 10-Q for the periods ended December 29, 2023 and March 29, 2024, in connection with the preparation of its Condensed Consolidated Financial Statements as of and for the three and six months ended December 29, 2023, the Company identified certain errors related to the Company’s reporting and recording of its interests in its equity method investments in Flash Partners Ltd., Flash Alliance Ltd., and Flash Forward Ltd. (collectively, “Flash Ventures”).

The errors related to unadjusted differences between Flash Ventures’ application of Japanese generally accepted accounting principles to certain lease-related transactions compared to the applicable U.S. generally accepted accounting principles.

These unadjusted differences resulted in differences in the equity in earnings from these entities recognized by the Company in Other income (expense), net and the carrying value of the Company’s equity method investments in Flash Ventures.

Based on an analysis of quantitative and qualitative factors in accordance with SAB No. 99, “Materiality,” and SAB No. 108, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements,” and as described further in Note 18, *Revision of Previously Issued Financial Statements*, the Company evaluated the errors and determined the related impacts were not material to its financial statements for the prior periods when they occurred, but that correcting the cumulative errors in the period detected would have been material to the Company's results of operations for that period.

[Table of Content](#i81392b4a1d0e495bb45df4a99b7c7393_10)[s](#i81392b4a1d0e495bb45df4a99b7c7393_10)

*Change in Accounting Principle*

As discussed in Note 2 to the consolidated financial statements, the Company has changed its method of accounting for convertible debt instruments and convertible preferred stock as of July 2, 2022 due to the adoption of Accounting Standards Update No. 2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity”.

accepted accounting principles.

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

As discussed in Note 3 to the consolidated financial statements, the goodwill balance as of June 30, 2023 was $10,037 million.

The Company tests goodwill for impairment on an annual basis as of the beginning of its fourth quarter or more frequently if events or changes in circumstances indicate that the goodwill may be impaired.

The Company performed a quantitative assessment as of the end of the first and second quarters of fiscal 2023 and again as of its annual goodwill impairment test date, and the fair value of each reporting unit was measured based on a combination of valuation techniques, including an income approach and a market approach.

Based on the Company’s analysis, the fair value of both reporting units was in excess of the carrying values and therefore, did not result in any goodwill impairment.

We identified the assessment of goodwill for impairment for the Company’s reporting units as a critical audit matter.

A high degree of subjective auditor judgment was required to evaluate the forecasted revenue, including revenue growth rates, forecasted cost of goods sold, and the company-specific risk premium 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 future market and economic conditions.

Differences in judgment used to determine these assumptions could have a significant effect on the Company’s assessment of the fair value of the reporting units.

Additionally, evaluating the company-specific risk premium assumption required specialized skills and knowledge.

We evaluated the design and tested the operating effectiveness of certain internal controls over the Company’s goodwill impairment process, including controls over the development of the forecasted revenue, forecasted cost of goods sold, and the company-specific risk premium assumptions.

We evaluated the Company’s forecasted revenue by comparing it to historical results and revenue growth rates projected for peer companies and the industry.

We evaluated the Company’s forecasted cost of goods sold by comparing it to historical results and by comparing the forecasted gross margin to historical gross margin for peer companies and the industry.

In addition, we involved valuation professionals with specialized skills and knowledge, who assisted in evaluating the company-specific risk premium by comparing management’s financial projections to publicly available forecasts of comparable companies and the Company’s actual operating results in prior years.

August 21, 2023

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

| Total assets | | | $ | 24,429 | | | | | $ | 26,259 | |

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

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

| Basic | | | | | | | | | | | | | | | $ | (5.44) | | | | | $ | 4.81 | | | | | $ | 2.69 | |

| Diluted | | | | | | | | | | | | | | | $ | (5.44) | | | | | $ | 4.75 | | | | | $ | 2.66 | |

| Inventories | | | (60) | | | | | | (22) | | | | | | (546) | | |

| Repayment of government grants | | | — | | | | | | — | | | | | | (9) | | |

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

| Balance at July 3, 2020 | | | — | | | | | | $ | — | | | | | | | | 312 | | | | | | $ | 3 | | | | | (10) | | | | | | $ | (737) | | | | | $ | 3,717 | | | | | $ | (157) | | | | | $ | 6,725 | | | | | $ | 9,551 | |

| Adoption of new accounting standard | | | — | | | | | | — | | | | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (7) | | | | | | (7) | | |

Previously, these investments were accounted for under the cost method of accounting.

The Company does not consolidate any cost method investment or equity method investment entities.

Goodwill is not amortized.

Changes in these estimates could materially affect the Company’s assessment of the fair value and goodwill impairment.

In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” (“ASU 2020-06”).

ASU 2020-06 reduces the number of accounting models for convertible debt instruments and convertible preferred stock and results in fewer instruments with embedded conversion features being separately recognized from the host contract as compared with current standards.

Those instruments that do not have a separately recognized embedded conversion feature will no longer recognize a debt issuance discount related to such a conversion feature and would recognize less interest expense on a periodic basis.

Additionally, the ASU amends the calculation of the share dilution impact related to a conversion feature and eliminates the treasury method as an option.

The Company adopted the new standard effective July 2, 2022, the first day of the year ending June 30, 2023, using the modified retrospective method.

On the date of adoption, the Company recorded a reduction in Additional paid-in capital of $128 million, a reduction of unamortized debt discount of $48 million, a reduction of deferred income tax liabilities of $11 million, and an increase to retained earnings of $91 million for 2023 for the after-tax impact of previously recognized amortization of the debt discount associated with the Company’s convertible senior notes.

Our management evaluated the effectiveness of our internal control over financial reporting using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in *Internal Control [removed: —] [added: –] Integrated Framework (2013).* Based on this evaluation, our management concluded that our internal control over financial reporting was effective as of the end of the period covered by this Annual Report on Form 10‑K.

There has been no change in our internal control over financial reporting during the [removed: fourth] quarter ended June [removed: 30, 2023,] [added: 28, 2024,] that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

*Insider Trading Arrangements*

During the quarter ended June 28, 2024, the following directors or officers (as defined in Rule 16a-1(f) of the Exchange Act) adopted trading arrangements for the purchase or sale of securities that are intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) of the Exchange Act (“Rule 10b5-1 Plan”):

- Kimberly E.

Alexy, a director of the Company, adopted a Rule 10b5-1 Plan on May 24, 2024.

Under this plan, beginning on August 23, 2024, up to an aggregate of 4,963 shares of the Company’s common stock may be sold before the plan expires on February 24, 2025.

- Matthew E.

Massengill, a director of the Company, adopted a Rule 10b5-1 Plan on May 30, 2024.

Under this plan, beginning on August 29, 2024, up to an aggregate of 23,593 shares of the Company’s common stock may be sold before the plan expires on December 6, 2024.

- David Goeckeler, Chief Executive Officer of the Company adopted a Rule 10b5-1 Plan on June 6, 2024.

Under this plan, beginning on September 5, 2024, up to an aggregate of 300,000 shares of the Company’s common stock may be sold before the plan expires on December 31, 2024.

None.

There is incorporated herein by reference [added: to] the information required by this Item included in the Company’s Proxy Statement for the [removed: 2023] [added: 2024] Annual Meeting of Stockholders, which will be filed with the SEC no later than 120 days after the close of the year ended June [removed: 30, 2023.][added: 28, 2024.]

There is incorporated herein by reference [added: to] the information required by this Item included in the Company’s Proxy Statement for the [removed: 2023] [added: 2024] Annual Meeting of Stockholders, which will be filed with the SEC no later than 120 days after the close of the year ended June [removed: 30, 2023.][added: 28, 2024.]

There is incorporated herein by reference [added: to] the information required by this Item included in the Company’s Proxy Statement for the [removed: 2023] [added: 2024] Annual Meeting of Stockholders, which will be filed with the SEC no later than 120 days after the close of the year ended June [removed: 30, 2023.][added: 28, 2024.]

There is incorporated herein by reference [added: to] the information required by this Item included in the Company’s Proxy Statement for the [removed: 2023] [added: 2024] Annual Meeting of Stockholders, which will be filed with the SEC no later than 120 days after the close of the year ended June [removed: 30, 2023.][added: 28, 2024.]

There is incorporated herein by reference [added: to] the information required by this Item included in the Company’s Proxy Statement for the [removed: 2023] [added: 2024] Annual Meeting of Stockholders, which will be filed with the SEC no later than 120 days after the close of the year ended June [removed: 30, 2023.][added: 28, 2024.]

| [removed: [3.1](https://www.sec.gov/Archives/edgar/data/0000106040/000095013706001502/a17011exv3w1.htm)] [added: [3.3](https://www.sec.gov/Archives/edgar/data/0000106040/000119312521041457/d128208dex31.htm)] | | | | | | Amended and Restated [removed: Certificate of Incorporation] [added: By-Laws] of Western Digital Corporation, as amended [removed: to date] [added: effective as of February 10, 2021] (Filed as Exhibit 3.1 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 February [removed: 8, 2006)] [added: 12, 2021)] | | |

| [removed: [3.](https://www.sec.gov/Archives/edgar/data/0000106040/000119312523020502/d425756dex31.htm)[2](https://www.sec.gov/Archives/edgar/data/0000106040/000119312523020502/d425756dex31.htm)] [added: [3.2](https://www.sec.gov/Archives/edgar/data/0000106040/000119312523020502/d425756dex31.htm)] | | | | | | Certificate of Designations, Preferences and Rights of Series A Convertible Perpetual Preferred Stock (Filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K (File No. 1-08703) with the Securities and Exchange Commission on February 1, 2023) | | |

| [removed: [3.](https://www.sec.gov/Archives/edgar/data/0000106040/000119312521041457/d128208dex31.htm)[3](https://www.sec.gov/Archives/edgar/data/0000106040/000119312521041457/d128208dex31.htm)] [added: [10.2](https://www.sec.gov/Archives/edgar/data/0000106040/000119312523279782/d689245dex101.htm)] | | | | | | [added: Western Digital Corporation] Amended and Restated [removed: By-Laws of Western Digital Corporation, as amended effective as of February 10,] 2021 [added: Long-Term Incentive Plan] (Filed as Exhibit [removed: 3.1] [added: 10.1] to the Company’s Current Report on Form 8-K (File No. [removed: 1-08703)] [added: 001-08703)] with the Securities and Exchange Commission on [removed: February 12, 2021)] [added: November 17, 2023)*] | | |

| [removed: [4.1](https://www.sec.gov/Archives/edgar/data/106040/000010604021000040/wdc-2021q4ex41.htm)] [added: [10.7](https://www.sec.gov/Archives/edgar/data/0000106040/000010604021000040/wdc-2021q4ex107.htm)] | | | | | | [removed: Description of] Western Digital [removed: Corporation’s Capital Stock] [added: Corporation Amended and Restated Executive Severance Plan, amended and restated as of May 24, 2021] (Filed as Exhibit [removed: 4.1] [added: 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, [removed: 2021)] [added: 2021)*] | | |

| [removed: [4.4](https://www.sec.gov/Archives/edgar/data/106040/000119312518042423/d538323dex42.htm)] [added: [4.7](https://www.sec.gov/Archives/edgar/data/0000106040/000119312523270415/d407149dex41.htm)] | | | | | | Indenture (including Form of [removed: 1.50%] [added: 3.00%] Convertible Senior Notes due [removed: 2024),] [added: 2028),] dated as of [removed: February 13, 2018,] [added: November 3, 2023 (the “Indenture”),] among [removed: Western Digital Corporation; HGST, Inc., WD Media, LLC,] [added: (i)] Western Digital [removed: (Fremont), LLC and] [added: Corporation, (ii)] Western Digital Technologies, Inc., as [removed: guarantors;] [added: guarantor,] and [added: (iii)] U.S. Bank [added: Trust Company,] National Association, as trustee (Filed as Exhibit [removed: 4.2] [added: 4.1] to the Company’s Current Report on Form 8-K (File No. [removed: 333-222762)] [added: 1-08703)] with the Securities and Exchange Commission on [removed: February 13, 2018)] [added: November 3, 2023)] | | |

| [removed: [4.5](https://www.sec.gov/Archives/edgar/data/0000106040/000119312522187239/d257590dex41.htm)] [added: [4.5](https://www.sec.gov/Archives/edgar/data/106040/000119312521353971/d253588dex41.htm)] | | | | | | [removed: First Supplemental] Indenture, dated as of [removed: June 30, 2022, by and] [added: December 10, 2021,] between Western Digital Corporation and U.S. Bank National Association, as trustee (Filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K (File No. 1-08703) with the Securities and Exchange Commission on [removed: July 1, 2022)] [added: December 10, 2021)] | | |

| [removed: [4.6](https://www.sec.gov/Archives/edgar/data/0000106040/000119312521353971/d253588dex41.htm)] [added: [4.6](https://www.sec.gov/Archives/edgar/data/106040/000119312521353971/d253588dex42.htm)] | | | | | | [removed: Indenture,] [added: First Supplemental Indenture (including Form of 2.850% Senior Notes due 2029 and Form of 3.100% Senior Notes due 2032),] dated as of December 10, 2021, between Western Digital Corporation and U.S. Bank National Association, as trustee (Filed as Exhibit [removed: 4.1] [added: 4.2] to the Company’s Current Report on Form 8-K (File No. 1-08703) with the Securities and Exchange Commission on December 10, 2021) | | |

| [removed: [10.1.1](https://www.sec.gov/Archives/edgar/data/106040/000010604021000011/wdc-2021q2ex102.htm)] [added: [10.1(1)](https://www.sec.gov/Archives/edgar/data/0000106040/000010604021000053/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 Amended and Restated Western Digital Corporation 2017 Performance Incentive Plan (Filed as Exhibit [removed: 10.2] [added: 10.1] to the Company’s Quarterly Report on Form 10-Q (File No. 1-08703) with the Securities and Exchange Commission on [removed: February 9,] [added: November 4,] 2021)* | | |

| [removed: [10.1.2](https://www.sec.gov/Archives/edgar/data/106040/000010604021000011/wdc-2021q2ex102.htm)] [added: [10.1(2)](https://www.sec.gov/Archives/edgar/data/0000106040/000010604021000053/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 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 [removed: February 9,] [added: November 4,] 2021)* | | |

| [removed: [10.1.3](https://www.sec.gov/Archives/edgar/data/106040/000010604021000053/wdc-2022q1ex101.htm)] [added: [10.1(4)](https://www.sec.gov/Archives/edgar/data/0000106040/000010604021000053/wdc-2022q1ex103.htm)] | | | | | | Form of Notice [removed: and] [added: of] Grant of [removed: Performance] [added: Restricted] Stock Units and [removed: Performance] [added: Restricted] Stock Unit Award [removed: Agreement- Financial Measure,] [added: Agreement - Vice President and Above,] under the Amended and Restated Western Digital Corporation 2017 Performance Incentive Plan (Filed as Exhibit [removed: 10.1] [added: 10.3] to the Company’s Quarterly Report on Form 10-Q (File No. 1-08703) with the Securities and Exchange Commission on November 4, 2021)* | | |

| [removed: [10.1.4](https://www.sec.gov/Archives/edgar/data/106040/000010604021000053/wdc-2022q1ex102.htm)] [added: [10.2(1)](https://www.sec.gov/Archives/edgar/data/0000106040/000010604022000065/wdc-2023q1ex101.htm)] | | | | | | Form of Notice [removed: and] [added: of] Grant of Performance Stock Units and Performance Stock Unit Award [removed: Agreement- TSR Measure,] [added: Agreement] under the [removed: Amended and Restated] Western Digital Corporation [removed: 2017 Performance] [added: 2021 Long-Term] Incentive Plan (Filed as Exhibit [removed: 10.2] [added: 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: 4, 2021)*] [added: 2, 2022)*] | | |

| [removed: [10.1.5](https://www.sec.gov/Archives/edgar/data/106040/000010604021000053/wdc-2022q1ex104.htm)] [added: [10.2(5)](https://www.sec.gov/Archives/edgar/data/0000106040/000010604023000024/wdc-2023q4ex1024.htm)] | | | | | | Western Digital Corporation Amended and Restated [removed: 2017 Performance] [added: 2021 Long-Term] Incentive Plan Non-Employee Director Restricted Stock Unit Grant Program, amended and restated as of [removed: August 16, 2021] [added: May 23, 2023] (Filed as Exhibit [removed: 10.4] [added: 10.2(4)] to the Company’s [removed: Quarterly] [added: Annual] Report on Form [removed: 10-Q] [added: 10-K] (File No. 1-08703) with the Securities and Exchange Commission on [removed: November 4, 2021)*] [added: August 22, 2023)*] | | |

| [removed: [10.1.6](https://www.sec.gov/Archives/edgar/data/106040/000010604018000034/wdc-2019q1ex103.htm)] [added: [10.1(3)](https://www.sec.gov/Archives/edgar/data/0000106040/000010604021000011/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 6, 2018)*] [added: February 9, 2021)*] | | |

| [removed: [10.1.7](https://www.sec.gov/Archives/edgar/data/106040/000010604019000075/wdc-2020q1ex103.htm)] [added: [10.2(3)](https://www.sec.gov/Archives/edgar/data/0000106040/000010604022000018/wdc-2022q2ex104.htm)] | | | | | | Form of [removed: Notice of] Grant [removed: of Restricted Stock Units and] [added: Notice for] Restricted Stock Unit Award [removed: Agreement -] [added: –] Vice President and [removed: Above] [added: Above,] under the Western Digital Corporation [removed: 2017 Performance] [added: 2021 Long-Term] Incentive Plan (Filed as Exhibit [removed: 10.3] [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: November 12, 2019)*] [added: February 3, 2022)*] | | |

| [removed: [10.1.8](https://www.sec.gov/Archives/edgar/data/106040/000010604021000011/wdc-2021q2ex104.htm)] [added: [10.2(4)](https://www.sec.gov/Archives/edgar/data/0000106040/000010604023000024/wdc-2023q4ex1023.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: Amended and Restated 2021 Long-Term] Incentive Plan (Filed as Exhibit [removed: 10.4] [added: 10.2(3)] to the Company’s [removed: Quarterly] [added: Annual] Report on Form [removed: 10-Q (Filed] [added: 10-K (File] No. 1-08703) with the Securities and Exchange Commission on [removed: February 9, 2021)*] [added: August 22, 2023)*] | | |

| [removed: [10.1.9](https://www.sec.gov/Archives/edgar/data/0000106040/000010604018000034/wdc-2019q1ex103.htm)] [added: [10.2(2)](https://www.sec.gov/Archives/edgar/data/0000106040/000010604023000034/wdc-2024q1ex101.htm)] | | | | | | Form of [removed: Notice of] Grant [removed: of Restricted Stock Units and Restricted] [added: Notice for Performance] 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 [removed: 10.3] [added: 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: 4, 2021)*] [added: 7, 2023)*] | | |

| [removed: [10.1.10](https://www.sec.gov/Archives/edgar/data/106040/000010604021000053/wdc-2022q1ex104.htm)] [added: [10.8](https://www.sec.gov/Archives/edgar/data/106040/000089256902002190/a85682exv10w4.txt)] | | | | | | Form of [removed: Notice of Grant of Restricted Stock Units and Restricted Stock Unit Award] [added: Indemnity] Agreement [removed: under the] [added: for Directors of] Western Digital Corporation [removed: 2017 Performance Incentive Plan] (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 [removed: 6, 2018)*] [added: 8, 2002)*] | | |

| [removed: [10.2](https://www.sec.gov/Archives/edgar/data/106040/000119312522288992/d407769dex101.htm)] [added: [10.4](https://www.sec.gov/Archives/edgar/data/106040/000119312522288992/d407769dex102.htm)] | | | | | | Western Digital Corporation Amended and Restated [removed: 2021 Long-Term Incentive] [added: 2005 Employee Stock Purchase] Plan, amended and restated as of August 25, 2022 (Filed as Exhibit [removed: 10.1] [added: 10.2] to the Company’s Current Report on Form 8-K (File No. 1-08703) with the Securities and Exchange Commission on November 18, 2022)* | | |

| [removed: [10.](https://www.sec.gov/Archives/edgar/data/106040/000010604021000053/wdc-2022q1ex101.htm)[2](https://www.sec.gov/Archives/edgar/data/106040/000010604021000053/wdc-2022q1ex101.htm)[.1](https://www.sec.gov/Archives/edgar/data/106040/000010604021000053/wdc-2022q1ex101.htm)] [added: [10.9](https://www.sec.gov/Archives/edgar/data/106040/000089256902002190/a85682exv10w5.txt)] | | | | | | Form of [removed: Notice of Grant of Performance Stock Units and Performance Stock Unit Award] [added: Indemnity] Agreement [removed: under the] [added: for Officers of] Western Digital Corporation [removed: 2021 Long-Term Incentive Plan] (Filed as Exhibit [removed: 10.1] [added: 10.5] to the Company’s Quarterly Report on Form 10-Q (File No. 1-08703) with the Securities and Exchange Commission on November [removed: 2, 2022)*] [added: 8, 2002)*] | | |

| [removed: [10.](https://www.sec.gov/Archives/edgar/data/106040/000010604021000011/wdc-2021q2ex104.htm)[2](https://www.sec.gov/Archives/edgar/data/106040/000010604021000011/wdc-2021q2ex104.htm)[.2](https://www.sec.gov/Archives/edgar/data/106040/000010604021000011/wdc-2021q2ex104.htm)] [added: [10.6](https://www.sec.gov/Archives/edgar/data/0000106040/000010604021000040/wdc-2021q4ex106.htm)] | | | | | | [removed: Form of Grant Notice for Restricted Stock Unit Award – Vice President and Above, under the] Western Digital Corporation [added: Amended and Restated Change in Control Severance Plan, amended and restated as of May 24,] 2021 [removed: Long-Term Incentive Plan] (Filed as Exhibit [removed: 10.4] [added: 10.6] to the Company’s [removed: Quarterly] [added: Annual] Report on Form [removed: 10-Q] [added: 10-K] (File No. 1-08703) with the Securities and Exchange Commission on [removed: February 3, 2022)*] [added: August 27, 2021)*] | | |

| [removed: [10.](https://www.sec.gov/Archives/edgar/data/106040/000119312522288992/d407769dex102.htm)[4](https://www.sec.gov/Archives/edgar/data/106040/000119312522288992/d407769dex102.htm)] [added: [10.12](https://www.sec.gov/Archives/edgar/data/106040/000119312523020502/d425756dex104.htm)] | | | | | | [removed: Western Digital Corporation] Amended and Restated [removed: 2005 Employee Stock Purchase Plan, amended] [added: Letter Agreement, dated January 31, 2023, by] and [removed: restated as of August 25, 2022] [added: between Western Digital Corporation and Elliott Investment Management L.P.] (Filed as Exhibit [removed: 10.2] [added: 10.4] to the Company’s Current Report on Form 8-K (File No. 1-08703) with the Securities and Exchange Commission on [removed: November 18, 2022)*] [added: February 1, 2023)] | | |

| [removed: [10.](https://www.sec.gov/Archives/edgar/data/106040/000119312512449441/d419625dex104.htm)[5](https://www.sec.gov/Archives/edgar/data/106040/000119312512449441/d419625dex104.htm)] [added: [10.5](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 Quarterly Report on Form 10-Q (File No. 1-08703) with the Securities and Exchange Commission on November 2, 2012)* | | |

| [removed: [10.](https://www.sec.gov/Archives/edgar/data/0000106040/000010604021000040/wdc-2021q4ex106.htm)[6](https://www.sec.gov/Archives/edgar/data/0000106040/000010604021000040/wdc-2021q4ex106.htm)] [added: [10.13](https://www.sec.gov/Archives/edgar/data/106040/000010604023000017/wdc-2023q3ex101.htm)] | | | | | | [added: Investment Agreement, dated January 31, 2023, by and between] Western Digital Corporation [removed: Amended] and [removed: Restated Change in Control Severance Plan, amended and restated as of May 24, 2021] [added: AP WD Holdings, L.P.] (Filed as Exhibit [removed: 10.6] [added: 10.1] to the Company’s [removed: Annual] [added: Quarterly] Report on Form [removed: 10-K] [added: 10-Q] (File No. 1-08703) with the Securities and Exchange Commission on [removed: August 27, 2021)*] [added: May 10, 2023)] | | |

| [removed: [10.](https://www.sec.gov/Archives/edgar/data/0000106040/000010604021000040/wdc-2021q4ex107.htm)[7](https://www.sec.gov/Archives/edgar/data/0000106040/000010604021000040/wdc-2021q4ex107.htm)] [added: [10.14](https://www.sec.gov/Archives/edgar/data/106040/000010604023000017/wdc-2023q3ex102.htm)] | | | | | | [added: Investment Agreement, dated January 31, 2023, by and among] Western Digital [removed: Corporation Amended and Restated Executive Severance Plan, amended] [added: Corporation, Elliott Associates, L.P.] and [removed: restated as of May 24, 2021] [added: Elliott International, L.P.] (Filed as Exhibit [removed: 10.7] [added: 10.2] to the Company’s [removed: Annual] [added: Quarterly] Report on Form [removed: 10-K] [added: 10-Q] (File No. 1-08703) with the Securities and Exchange Commission on [removed: August 27, 2021)*] [added: May 10, 2023)] | | |

| [removed: [10.](https://www.sec.gov/Archives/edgar/data/106040/000089256902002190/a85682exv10w4.txt)[8](https://www.sec.gov/Archives/edgar/data/106040/000089256902002190/a85682exv10w4.txt)] [added: [10.15](https://www.sec.gov/Archives/edgar/data/106040/000119312523020502/d425756dex103.htm)] | | | | | | [removed: Form of Indemnity Agreement for Directors of] [added: Registration Rights Agreement, dated January 31, 2023, by and among] Western Digital [removed: Corporation] [added: Corporation, AP WD Holdings, L.P., Elliott Associates, L.P. and Elliott International, L.P.] (Filed as Exhibit [removed: 10.4] [added: 10.3] 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: November 8, 2002)*] [added: February 1, 2023)] | | |