106040--8/28/2007--WESTERN_DIGITAL_CORP

related topics
{product, market, service}
{customer, product, revenue}
{debt, indebtedness, cash}
{property, intellectual, protect}
{operation, natural, condition}
{acquisition, growth, future}
{capital, credit, financial}
Increases in areal density may outpace customers demand for storage capacity, which may lower the prices our customers are willing to pay for new products. A fundamental change in recording technology could result in significant increases in our operating expenses and could put us at a competitive disadvantage. Dependence on a limited number of qualified suppliers of components and manufacturing equipment could lead to delays, lost revenue or increased costs. Our head manufacturing operations include a single wafer fabrication facility in Fremont, California and a single head gimbal assembly facility in Bang Pa-In, Thailand, and our planned media operations will include four facilities in Malaysia, which subjects us to substantial risk of damage or loss if operations at either of these facilities are disrupted. There are certain additional capital expenditure costs and asset utilization risks to our business associated with our strategy to vertically integrate our operations. If we are unable to timely and cost-effectively develop heads and media, following our planned acquisition of Komag, 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. Current or future competitors may gain a technology advantage or develop an advantageous cost structure that we cannot match. If we do not successfully expand into new hard drive markets and manage the issues associated with new products and new markets, our business may suffer. Selling to the retail market has become an important part of our business, and if we fail to maintain and grow our market share or gain market acceptance of our branded products, our operating results could suffer. Terrorist attacks may adversely affect our business and operating results. Our reliance on intellectual property and other proprietary information subjects us to the risk that these key ingredients of our business could be copied by competitors. Increases in our customers credit risk could result in credit losses and an increase in our operating costs.

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