Okay, great. We'd like to get started. Thank you all for coming. I'm Toshiya Hari, I cover the semiconductor space at Goldman Sachs. We're very pleased, very excited, very honored to have the team from Western Digital with us today. We have David Goeckeler, Chief Executive Officer. We also have Peter Andrew, Vice President of Financial Planning and Analysis, and Investor Relations. Before we go to questions, turn the mic over to Peter.
Thank you, Toshiya, for having us here today. And before we begin, I must read the safe harbor statement. So we will be making forward-looking statements based on current assumptions and expectations, and I ask that you refer to our most recent annual report on Form 10-K and our other filings with the SEC for more information on the risks and uncertainties that could cause actual results to differ materially. We will also be making references to non-GAAP financial measures, and a reconciliation of our GAAP to the non-GAAP results can be found on our website. So with that, let me turn it back to you.
Great. Thanks, Peter. David, again, thank you for the time.
Well, thanks for-
You're very-
Thanks for having us. We appreciate the time. It's always good, fun to talk about business.
Yeah, for sure. Thank you so much. So I guess we were just talking about COVID, but ... it's been three and a half years.
Yeah
... since you joined the company as the CEO. I think you've taken various actions since joining the company, whether it be changes to your capital allocation model, introducing the BU structure of the company. As you think about the go forward, are there other structural changes you feel like you need to introduce, or do you feel pretty good about the setup of the company at this point?
I feel, I feel very good about where we are and what we've done over the last several years. I mean, if you look at the focus areas where we focused, I mean, it was first focused on the balance sheet, as you talked about, change capital allocation strategy, paid down $2.7 billion worth of debt. That came in quite handy over the last year and a half. Then we focused on the portfolio, which was basically bring in some folks that could lead our portfolio decision-making process and building products. That's led us to the point where I think we have a market-leading portfolio, both on the hard drive business and in the flash business. I think that's shown up in the downturn in the way the business is performing. We focused on operations.
I felt we needed to get more Asia-centric, if you will. That's where we have a lot of people, a lot of factories, especially COVID brought that home because we couldn't travel. So brought in a new head of operations in Singapore. It's made a huge amount of changes in the way we're organized, organized that around business as well, and it's taken a lot of cost out of the system. Our fixed costs in HDD is the lowest they've been in well over a decade. So I think we're just much more efficient. We've talked about taking client capacity out of the system in hard drives. So we're just a much more efficient company. Focused on the JV. Quite frankly, that was an area that's a huge strategic advantage for us.
We spent a lot of time making sure we have the right relationship with our JV partners and with Japan in general. And then focused on any other issues that were going to, you know, undermine our ability to move the company where we wanted. We settled a long-running tax dispute that went back to 2008. It's always painful to have that money go out of the company, but it's behind us now and gives us much more strategic flexibility in the future. So I feel like a lot of the changes we've made are now really showing up in the performance of the business. I think that showed up in the downturn especially. Feel very good about where we are and our ability to generate profit out of both franchises as demand returns.
Great. Now that you've gone through all those items, I can appreciate all the change that that's come about since you joined the company. So you've been going through this strategic review for some time now. I do not expect an update. You're not going to give it anyways, but
You never know what's going to happen.
You never know. You never know. Market's not open. But what are some of the things that you may have learned from the process so far? I'm sure you're speaking with all sorts of people, internal and external, and the way, you know, Western Digital is perceived as a company, as a business. Anything surprised you throughout this process?
Nothing has surprised me. It's been a great process. It's been a lot of parties involved. It's very robust process, continues to be. One thing I've learned, quite frankly, is people can ask a lot of very clever questions about what's going on in the strategic review without asking that directly. So it's amazed me the number of interesting questions I've got, but it's very understandable. Look, we'll talk more about the strategic review when it ends. We committed to a process, a public process, to determine if there's a better way to unlock value. We believe the business is performing well. We believe there's latent value in it. We're committed to unlocking that. We committed to a process, we're going to see it through. I believe that once you start a process, you have to keep going.
You can't just set an artificial deadline. I think all that said, we are in the home stretch of the process. I expect that we'll wrap this up by the end of the year. So, it's been a great process, and I look forward to talking about the results of it when we get there.
Got it. Understood. Shifting gears a little bit, AI is a big focus-
Yeah
... for you guys, for the broader industry. But that said, there tends to be a lot of focus on compute-
Yes
... because you're seeing a lot of spend in that space today. Curious what your thoughts are on storage as you engage with customers, talk about AI. You're not quite seeing it today, but how should we think about the opportunities there going forward?
Look, I think it's super exciting. I mean, you know, the way the world distributes technology is fundamentally changed in the last couple of decades. We now have this huge cloud distribution model for technology, and that allows all of us to access the latest technology at a more rapid pace than ever before. And what I see happening with generative AI right now is essentially that process is working, and we're in the early phase of it, and the big cloud suppliers are building that capability in their infrastructure as rapidly as they can. And I think that's nothing but great, because the faster they do that, the faster all of us are going to be enabled with tools that allow us to do all kinds of tasks more productively, better, more efficient, live better lives, drive better businesses.
For storage, in particular, you know, in many ways, what's happening is a whole new set of capabilities are being created and made available to all of us very rapidly, that's going to automate the ability to create content in ways that we just couldn't do before. And when you automate the ability to create content, you're going to have more data to store, and that's where we come in. So I think we're kind of the second wave of this. The first wave is kind of just going now as everybody tries to build up the capability. But again, the way it's being built up and the way the technology is being distributed is literally, you know, hundreds of millions, if not billions, of people are going to have access to this technology faster than any other technology that's ever been developed.
And that—for our business and everybody else that's in the ecosystem of technology, that's a great thing. This is kind of the fundamental premise of why I came to Western Digital, because storage is one of the fundamental building blocks of the technology architecture that all of us depend upon. Here, the world has discovered another fantastic technology innovation that all of us are going to be able to use, and the faster that gets deployed, the better. So I'm a big cheerleader of that getting deployed absolutely as quickly as possible. Our business is 29%-30% of the TAM of data centers. That's not going to change, and as we generate more data, we're going to be a, we're going to be a big beneficiary of that.
That's great. Obviously, two sides to the house. So I want to start off with the NAND side of the business. You know, it's been a really difficult stretch for the broader industry, you know, with pricing and the profitability. Now that the worst appears to be behind you and the industry, can you explain to us why industry fundamentals got this poor? Is it the bubble to the upside that we saw during COVID, and we're kind of on the other side of that cycle, so this was sort of one time and transient, or could there be something more structural at play here?
You know, I think like anything in life, it's this severe, that's a culmination of a bunch of factors, right? I think you've got the first one, which is we just had this huge surge on the demand side. I mean, if we look back a year ago, two years ago, we were talking about, you know, up to 1 million PCs a day. Let's just pick on that market. We went from 240 million to 340 million, 350 million, 350 million units a year. Now we're coming back down to where we were. So that. You know, if you were procuring on a, on a projection of that many more units, you ended up with just, like, way too much inventory. So that correction is particularly severe. So that was a big part of it.
You know, we kind of had this signal from the pandemic that a lot of over-procurement in markets, a lot of scarcity in the supply chain that exacerbated that. So that's one part of it. Then you came out of the pandemic into an uncertain macro environment, right? Are we in a recession? Are we not in a recession? Is there going to be a soft landing? Is there not going to be a soft landing? Is China coming back? Is it not coming back? So there's a lot of uncertainty in the macro environment. You add on top of that, the cost of capital has gone up fundamentally for the first time in what, 15 or 20 years?
So now it's like the cost of, like, holding inventory, the way you spend OpEx, everybody is more focused on this, and so that's another thing that customers are going to pull back. "I'm only going to hold what I, what I need." And, you know, also going into the pandemic in the NAND industry, a lot of suppliers were just going through nodal transitions that were much more productive, so you kind of had this surge of supply at the same time. So you add it all up, and it's been a relatively severe correction. A lot, a lot, a lot of ways to come down to get back on the trend line of growth. Good news is that trend line of growth is still there. The industry in... You know, I'll speak mainly about us.
Sure.
You look at the dynamics of what's happening, pull back on utilization, slow down CapEx, slow down the nodal transitions, get the fab aligned with what demand is, and now, you know, we've been doing that over the last year, and now you're seeing the industry behave what you would expect. Pricing is moderating. For us, the last four quarters have been down 22, 20, 10, and six. So you're kind of coming in. You're now starting to see bit demand go up, right? So volume is increasing, and so the industry is working. I think we're going to have a couple quarters of stabilization here, but as we get supply and demand balanced, and then we'll be back on the growth curve.
And the other things that are happening inside of that, you're seeing the elasticity is working in our consumer business. Client SSDs or our personal SSDs are up 40% in content year-over-year. Client SSDs are up 20% year-over-year. So even though units are down, you're seeing the amount of NAND per unit going up. So the industry is working in the way it's supposed to. We've just got a little bit more to work through.
Mm-hmm. Mm-hmm. So essentially, it was kind of the perfect storm, if you will?
Yeah, and so I guess you could say that.
Right.
I mean, it's-
A lot of things-
... There were, there's just a lot of things going on, right? A lot of different factors that all came together to create a, you know, a big correction in the industry. But like I said, the fundamental drivers, where we started-
Mm-hmm
... like this fundamental driver of the cloud architecture, driving intelligent devices, tied together by high-speed networks. That's the architecture. The whole world is now built on top of this technology architecture.... fundamentally different than it's been, you know, in decades past, and that will drive a pace of innovation that continues to go on and on. And, you know, here we are, generative AI, another big idea that's gonna come along, that's gonna be another leg of demand driver in our industry. So, you know, the fundamentals are really there for the long-term value proposition that we're talking about, very firmly in place. A lot of distortions over the last two or three years on that system that we're working through.
Got it. That makes sense. Then, you know, you talked about bit growth accelerating or growing on a sequential basis. You've also talked about green shoots on a couple of your earnings calls. When you think about the key end markets or applications, again, within the context of your NAND business, where are you actually seeing these green shoots? Which end markets are you most constructive on as you think about, you know, call it the next couple of quarters, which end markets do you feel like there's still a couple more quarters to go in terms of a correction?
So, you know, it's a little bit first-in, first-out. I mean, the consumer business is pretty much stabilized. You know, if we look at how the business performs week-over-week, month-over-month, quarter-over-quarter, it's more predictable than it was, you know, several quarters ago. You know, pricing is still depressed, but the way the business is flowing, the sell-through, much more predictable. If you look at the PC market, I think most of the suppliers are through inventory correction. They're kind of building to demand, so that looks like a more, you know, more normal situation. Gaming has been strong, quite frankly, throughout all of this. That's an area, a bright spot in the portfolio, where we've done a lot of brand building with WD_ BLACK.
So we're able to sell to the gaming consoles and play the retail side of it. That's been a great business for us and something we've built over the last 2 or 3 years. And then on the other side of the equation, the enterprise SSD market, kinda like we, you know, in the capacity enterprise hard drive business, still some inventory correction to work through there. Probably another couple of quarters, that comes back, and then you'll have kind of the full picture, everybody getting back to normal. But that was the last part of the franchise that went into the correction.
Got it. And then from a NAND supply perspective, you know, you talked about CapEx cuts and, and production cuts, and I think maybe a couple of quarters ago, yourselves and, and other companies were still speaking to the fact that the industry wasn't doing enough. But given your comments that you just made, it feels like you're feeling pretty good about what you, and obviously, but your, your peers are doing as well-
Yeah
... from a supply perspective.
I try to keep my comments to our company, right? And less speculation on the whole industry. But again, what we see in our business, we've kept trying to keep supply and demand pretty balanced by modulating the fab up and down and keep our inventory position under control. We made a lot of progress on that last quarter. I think our inventory position has been pretty good, across all of this. And so, yeah, I feel like we're seeing the behavior we expect to see at this point in the cycle.
Okay. Got it. And then on the tech roadmap in NAND, you talked about some of the node transitions being pushed out, and I guess that's not specific to you guys. But the one question that we often get from investors is, is Western Digital cutting into muscle?
Yeah.
How would you address that, that question?
So this goes back, again, the question you started with, changes we've made in the business since I came in. Like, you know, talk about-- there's been a lot of talk about going to business units and all this kind of focus, but really what we did was we brought in people where their focus is like: I'm gonna make the-- W- we're gonna put in a very disciplined ROI-based portfolio approach, where we know exactly what products we're gonna build. We have a stack rank of where we're gonna make money, what has the highest return. If we have more money to invest, we know what the incremental return on that is gonna be, and if we have to take money away, we know we're taking it away from the right place that has the least impact on the business.
So I think if you look at our portfolio throughout this downturn, you know, look at, you asked about NAND, but on the drive side of it, we continue to launch new products all through this down cycle, right? So the technology roadmap, you wanna make sure the core technology is there, and you're continuing to drive it forward. On the NAND side, the portfolio mix has been very, very good, and I think we've been able to get the best mix, best margin return out of our portfolio in the industry. So the portfolio strategy of being able to play across a broad cross-section of markets has worked. And then, you know, the core focus of the NAND portfolio, to your question, is the BiCS roadmap.
Right.
Right? That's the foundation of your portfolio. You've got to have the best cost in the industry, and we think about this very, very clearly, and this is something where the JV. I said earlier, invest in the JV. Why do we invest in the JV? 'Cause the JV allows us to really punch above our weight in a major way. Us and Kioxia, we have the exact same product roadmap. We work on it together, hand in glove, together. We're right there as the largest supplier in the industry. We've, you know, we've had 23 years of sustained excellence in innovation in NAND, 16 generations. Our capital efficiency over the last 5 years is a third lower than the industry or the next player in the industry. So we've had a sustained ability to innovate in the fundamental NAND roadmap that has underpinned the business literally for decades.
You know, here we are in the depth of the downturn, and we announce one of the most fundamental breakthroughs in NAND technology, which is wafer bonding. We've now commercialized wafer bonding, so we can build the CMOS separate from the NAND stack, flip one over, and bond them together. And we've now got that done. Everybody in the NAND industry continue to scale is going to have to do that. We're there. So that and there's a lot of benefits of that we can go into, but we're able to continue to drive that roadmap forward, and that's something why the JV is so important to us. And we stay focused on making sure good times, bad times, mid-cycle times, we stay focused and drive the best, best, best roadmap and the best cost position in the industry.
Right. I guess as a follow-up, maybe double-clicking on the wafer bonding technology, is that a performance and cost-enhancing technology?
Mm-hmm.
BiCS8, when should we expect crossover, if you've kind of spoken to that?
Crossover, crossover is going to depend on the - touch on that. It's going to depend on how fast we ramp back, right?
Right.
Because we'll ramp into BiCS8 from where we are now, so that, that's going to be next year sometime.
Mm-hmm.
But why is it better? We can build the CMOS separate from the NAND stack. So before you were building the NAND, you build the CMOS, just, like, start stacking the NAND on top of it, and you start degrading the CMOS underneath. So now you build them separately, you have this pristine CMOS. So you look at interface speeds, all of those kinds of things are much, much better, right? And then you have lower cycle time because you're processing two wafers and then putting them together, right? You can get faster yield ramps because you're doing them separately and then putting them together. So the technology is more efficient on wafers per or bits per wafer, of course, but you're also being able to ramp that faster, get higher yields. It's just a better way to build the technology.
In the future, you can, you know, you can, you can match the CMOS to different size NAND stacks at the same time. So you can innovate, you can, like, drive them, you can innovate both of them separately now.
That's interesting. And, maybe this is a question for your competitors, but what's the gap between yourselves and the competition as you think about wafer bonding technologies? Is it a year, is it two years? Is there a way to-
I'll let my peers answer that question, right?
Okay. That's fair.
I'm not going to speculate. I mean, it's something that when we went into the program, it was an ambitious program.
Mm-hmm.
It was a very ambitious program. It was something that the team knew we were going to have to cross this bridge at some point in the NAND technology roadmap. We took it on in BiCS8, and it, the program went extraordinarily well.
Okay, great. At your Investor Day last year, you talked about, you know, your aspirations in enterprise SSDs.
Yes.
I think you specifically talked about 8% market share doubling to 16%.
Yep.
you know, as you mentioned earlier, obviously, the market's going through a correction.
Yes.
I'm guessing it's harder to gain share when customers aren't buying much. But how would you rate progress there? And I know it's an important market for you longer-term.
It's an important... Look, progress has been good on the product. You're right. We sailed right into a time when exabytes year-over-year were way down, right? So it's a hard time to really gain share in that market, and that's shown up in our numbers. But if you looked at the products, products are still qualified. We're qualified at multiple hyperscale vendors. That what we set out to do, we still achieved that. We qualified the BiCS5 product at multiple hyperscalers. So we're set up that when the market comes back, we'll benefit from that. And that was an important pillar to build into the portfolio. I mean, the portfolio has a big consumer component, as we know.
We have some of the best, if not the best, well, definitely the best brands in the industry with SanDisk, SanDisk Professional, WD_ BLACK. We sell in every country in the world where it's legal, you know, hundreds of millions of devices a year. We have a great client SSD business, a lot of innovation there. The DRAM-less client SSD is something the team innovated. That's a big portfolio. We stay qualified at the biggest mobile suppliers. That's a big part of the portfolio. Gaming has been built out, and then adding the enterprise SSD portfolio to that, and then the ability to mix across those based on where we're going to get the best return, that's been the strategy.
I think over the last several quarters, you've seen our ability to generate margin out of our portfolio has been differentiated versus the rest of the industry.
Got it. Given everything that we just discussed related to the NAND business, is, you know, 35%-37% still the right through-cycle-
I think it's the right-
market target?
We're still... Yeah, that's the right through-cycle number that we're driving the portfolio to. We know that with better portfolio execution, things we can do in the portfolio, take cost out of certain products, certain SKUs, we can generate more profitability. So, that's the goal, that's what we're driving to, and that's what we're going to achieve on a through-cycle basis.
Great. Shifting gears to the hard drive business. Your nearest competitor on their earnings call talked about raising pricing in select markets, and I think that was surprising to some folks, just given how challenged, if you will, the near-term demand environment is. Is that something that you guys think about and pursue as well? I know you're always thinking about pricing strategically.
Always thinking.
But has there been sort of a change in how you think about pricing as, as you sort of better support the, the supply chain, your suppliers?
Yeah, I mean, look, we need a healthy supply chain. There's no doubt about that. I mean, pricing strategies are very different depending on which market you're in. The channel is very different than very big hyperscale customers and how you deal with them.
Mm-hmm.
So there's certainly a market clearing price in any industry, and we're going to participate in that and be at the right spot on pricing. I've said this before, and I really believe this: the best way to deal with pricing is to innovate. If you can bring a better product to your customers and give them a better value proposition, you're going to have a better opportunity to get a better price for that because you're providing value... and that's really where we're driving in the portfolio. I mean, we have a 26 TB UltraSMR product that is ramping very hard this quarter, and that's because some of the biggest data center operators in the world have decided that we're going to bet our future on SMR, and they're ramping to it.
And so we have that, and we just announced a 28 TB UltraSMR product. So the whole key is to continue to innovate, continue to bring better products, and you can have a better value conversation with your customers, and that's what we're driving to.
Okay. So rather than taking existing product and saying, "Hey, it's now $15, not $10," things like 26 and 28, as you continue to innovate, you'll obviously try your best to monetize the R&D-
Absolutely
... that went into it?
If the market will bear a higher price on other products, of course, we're going to find where that point is.
Got it. Got it. And you touched on this a little bit, but as it pertains to 26 and 28, how is kind of the customer qualification process going?
Well, 26 is now qualified at some very big customers, and they're ramping it, it significantly in this quarter. 28 is just shipping for qualifications-
Right
... out to customers now. But we, you know, the one thing about... There's many things about our product portfolio, but UltraSMR, you know, we put all these building blocks in place over the last three years or so. We had ePMR, we layered in OptiNAND, we layered in UltraSMR, and that gave us a bunch of levers to innovate on, to continue to drive density higher, so 26, 28 now. And, you can, you know, I'm not going to announce new products here, but we're not done. And those products are built on technology that's been commercialized, technology we know how to produce at very high yields. We can produce them at very high volumes very quickly. So this is a roadmap that's been put together and constructed over the last three to five years, where we have a lot of innovation levers.
They're proven technology that have been deployed in the largest data centers in the world for years now, and we're able to use those innovation levers to continue to drive the portfolio forward. We feel very good about that, and customers are responding to that.
Got it. Got it. I'm sure you're sick and tired of this question, but HAMR, as, as a technology, I think your view, your, opinion, outlook really hasn't changed. It's been very consistent over many years, but any sort of, you know, evolution in thought as you think about the timing and the evolution of the technology?
You know, HAMR is a technology. Its day will come, there's no doubt about it. It's been in the lab. It's been being worked on for decades, literally.
Yeah.
It's. You know, I think we're approaching the beginning of the HAMR phase, right? But it's going to be a five-plus year transition to that kind of technology. We're not quite there yet. Our strategy has been to fill, you know, the CMR gap got to, like, 20, 22, and then it kind of ran out of gas, and we needed these other layers, like ePMR, OptiNAND, UltraSMR. These are the things we're going to use to continue to go 24, 26, 28. We believed very strongly we needed a portfolio that we can drive up that, those capacity points in a very predictable, very scalable, highly reliable products that our customers can count on, and that's the strategy we've been playing out. Quite frankly, I think it was a fantastic decision five years ago to put those R&D programs in place.
Eventually, those will lead to HAMR folding into that roadmap, and that's a little bit of ways in the future, and then as we're going to continue to drive and go up that scale in a very predictable way.
Got it. I am going to pause here and see if we have any questions in the audience. If not, I'll keep going. Okay, I'll keep going. David, you're in a very unique position with, again, both HDDs and a NAND business.
Yeah.
some of your storage-
What could you possibly be ready to ask?
Some of your storage OEM customers have been very vocal and very adamant, actually for a very long time, that we're going all flash eventually. That clearly has not happened. Even with NAND pricing at these unsustainable levels, you can make the argument that HDDs have been absolutely fine on a relative basis.
Yeah.
Going through a correction, but fine on a relative basis. How have your thoughts evolved at all on that? Do you still feel like they're complementary technologies, and...
Yeah, my thoughts on this have not evolved that much in the last several years. I think that there can be a lot of conflation because on the device side of it, they're substitutes. They're complete substitutes. Like, very few people buy a laptop anymore with a hard drive in it. Like, so they were substitutes in that market. In the data center, they are highly complementary technologies. It's use case driven. There are parts of the data center where it's all flash. There are parts of the data center where it's all HDD, right? And if you look at those use cases, the flash use cases are growing slightly faster than the HDD use cases. The HDD use cases are still growing as well, but you look at the overall mix, it's like 85-15, right?
That is not changing dramatically. It changes a little bit because the flash use cases grow a little faster. But this idea that there's going to be, like, this complete technology substitution, it's just not realistic, right? There's no cost dynamics that make it... You know, as long as HDD can continue to innovate-
Mm
... and can continue to drive a roadmap, again, storage is about driving a lower cost per bit and continuing to innovate. As you drive a lower cost per bit, you expand the TAM.... That, we just talked about HAMR, right? We're just, you know, we've got years and years and years of innovation in hard drives to continue to drive more productivity. Just like in flash, we've got years and years and years of future in flash. Flash is an area where every generation, we get much more productivity for bits. All these things don't add up that they're substitutes of each other. The size of the markets are very different, the amount of investment it takes, it's very different. The cost per bit is very, very different, 6-9x cheaper for HDD, that's not changing.
Right.
As you said, the dynamics of the flash business is just when the cost starts coming down, and you start to think, "Oh, maybe there's gonna be a substitution," what happens? Everybody that's building a fab starts extracting money from the system because it's not profitable anymore. And then the system corrects. Like, the opinion that really matters on these issues, quite frankly, are what do customers say-
Yeah
... and the customers will tell you, HDD is the king of storage in the data center. And then, what are people that are putting capital behind fabs say, and those people are clearly voting with their dollars.
Sure.
How much is CapEx down this year, right? It's down significantly.
Yeah.
So if you looked at the two markets and you said there was gonna be a substitution, I mean, right now, the exabytes in HDD is 50% higher than the entire NAND market. The entire NAND market.
Mm.
So if there was gonna be some type of substitution effect, people that build fabs would be plowing enormous amounts of money and building fabs all over the world.
Right.
Nobody's doing that.
Right. Right.
The economics just don't work.
Right. Right. And I think historically you've said, I think it was you guys, the rate of cost per bit declines in HDD and NAND, they're fairly comparable, right?
NAND is, you know, to be fair, NAND is a little bit better.
Okay.
Right? NAND is a little bit better. They, you know, they're both great markets, like, this doesn't have to be, they're not-
Right, right.
They're not competing with each other. Again, they're complementary markets in the data center. On the device, they're substitutes, but on the, in the data center, they are highly complementary franchises that both will benefit from the growth of the cloud. It, it's just as simple as that.
Got it. All right. I'll pause here again. We have a couple of minutes. Any questions? Okay, maybe in the last 90 seconds, David, and maybe Peter, as you sort of converse with analysts and investors, anything about the Western Digital story or the markets you participate in, that we collectively, you know, just misunderstand or overlook or underestimate?
Look, I mean, we've spent a lot of time, and, you know, it's kind of where you. Let's go back to where you started. We, we've spent a lot of time in the business building a better company. We, you know, there's a lot of focus on the strategic review as our way to unlock value, and we, we believe on value needs to be unlocked as well, right? We're 100% behind that, but along the way, we can build a better business, and that's what we've done.
Mm.
I think that that has shown up in the downturn. Quite right, you told me this, like, a year and a half ago. You said, you know, like, I think you, you told me, like, sometimes management teams hope for a downturn because they can show what their business is really like-
Mm
... and what they're made of. I don't know if we would have hoped for this, but-
Yeah
... I think we've shown-
Pretty extreme, yeah.
... that our franchises can really perform well in the industry. Quite frankly, they're both performing better than their peers. We've made a lot of structural changes in the business. This isn't just, like, a few things here. We, we've fundamentally changed the company. We have two great franchises. Those will be able to as demand returns, those will be even better franchises. On top of that, we're fully committed, if there's a better idea for how we organize the company that unlocks value, we're gonna do that, too. We're not through that process, but in the meantime, we're gonna continue to build a better business.
Awesome. Well, with that, we're out of time. Really enjoyed the conversation.
Thank you.
Thank you so much.
Thank you.