Western Digital cuts revenue forecast, cites 'muted demand'
Follows Intel into fiscal hidey-hole
Storage megacorp Western Digital dropped a bomb on its investors – and the entire computer industry – by announcing that it was lowering its revenue projections for its first fiscal quarter, which will end on September 28.
That quarter, the company said in a press release on Thursday, will now see revenues of between $3.9 billion to $4.0 billion; Western Digital's previous guidance had been for $4.2 billion to $4.3 billion.
In the release, the drive giant blamed the downgrade on the fact that it "now expects the industry's total available market (TAM) for hard drives in the September quarter to be approximately 140 million units versus its earlier forecast of 157 million units, due to muted demand and inventory rebalancing."
Just one week ago, a similar drop in demand led Intel to also revise its revenue forecasts, lowering its third-quarter guidance to between $12.9bn and $13.5bn, down from its earlier projections of $13.8bn to $14.8bn.
Intel's downgrade was a 6.5 per cent reduction; Western Digital's was a bit higher at 7.1 per cent. Intel blamed its slippage on "softness in the enterprise PC market segment; and slowing emerging market demand" – which The Reg translates as being simply a more verbose way of describing what Western Digital called "muted demand".
Interestingly, the Irvine, California, drivemaker's downgrade comes at a time when its business should be doing relatively well – if it weren't for that pesky muted demand. Western Digital acquired Hitachi GST this March, a full year after announcing its intention to do so, and it appears to be recovering nicely from the last year's Thailand floods, which put a serious crimp in its production.
It may be too early to move all your assets into gold, but this new wave of "muted demand" and "softness" does appear to be muting and softening hopes for a full recovery from the multi-year Great Recession. ®
Prices too High
Prices still haven't gotten down to pre-flood levels.
People who can afford to, are waiting.
@MacRat Indeed. I want 4x2TB disks for a home server and I've got no intention of buying until the price is below what they were before the flood. I'm not going to pay for the fact that WD et al were stupid enough to build their factory in a flood plain.
WD: the first time I see 2TB disks for £50, I'll buy but not before then. That is a big hint.
Karma is a beach ROTFL
WD need to provide 4TB drives NOW, halve all their current prices, and stop the P take with the extortionate Red drives; so 2TB around £40, 3TB no more than £70, 4TB no more than £100. The Green drives are also not that good compared to the lower power competition, possibly being crippled to make the extortionate Red family look better.
I was not happy to have to pay £100 to replace a faulty WD drive in a RAID, when that drive cost £58 over a year earlier; ...rip-off!
WD still greedy pricing makes a Hitachi 4TB drive look quite attractively priced, as part of a redundant raid array; however I'll still delay building my next RAID as long as I can, and avoid WD if they don't see sense.