106040--8/14/2009--WESTERN_DIGITAL

related topics

{customer, product, revenue}

{product, market, service}

{cost, operation, labor}

{condition, economic, financial}

{operation, international, foreign}

{personnel, key, retain}

{operation, natural, condition}

{competitive, industry, competition}

{acquisition, growth, future}

If the worldwide economic downturn worsens, we may have to take additional steps to align our cost structure with demand, which could result in increased impairment charges and have a negative impact on our operating results. Our failure to accurately forecast market and customer demand for our products could adversely affect our business and financial results or operating efficiencies. If we fail to successfully manage our new product development or new market expansion, or if we fail to anticipate the issues associated with such development or expansion, our business may suffer. Selling to the retail market is an important part of our business, and if consumer spending continues to decrease, or if we fail to maintain and grow our market share or gain market acceptance of our branded products, our operating results could suffer. Further industry consolidation could provide competitive advantages to our competitors. A competitive cost structure is critical to our operating results, and increased costs may adversely affect our operating margin. Dependence on a limited number of qualified suppliers of components and manufacturing equipment could lead to delays, lost revenue or increased costs. Failure by certain suppliers to effectively and efficiently develop and manufacture components, technology or production equipment for our products may adversely affect our operations. If we are unable to timely and cost-effectively develop heads and magnetic media with leading technology and overall quality, our ability to sell our products may be significantly diminished, which could materially and adversely affect our business and financial results. The difficulty of introducing hard drives with higher levels of areal density and the challenges of reducing other costs may impact our ability to achieve historical levels of cost reduction. Spending to improve our technology and develop new technology to remain competitive may negatively impact our financial results. Terrorist attacks may adversely affect our business and operating results. If we are unable to retain or hire key staff and skilled employees our business results may suffer. Fluctuations in currency exchange rates as a result of our international operations may negatively affect our operating results. Inaccurate projections of demand for our product can cause large fluctuations in our quarterly results. Negative conditions in the global credit markets may impair the liquidity of a portion of our investment portfolio.

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106040--8/14/2009--WESTERN_DIGITAL_CORP