Western Digital's (WDC) Thailand Project Reportedly Gets Approval
Western Digital Corporation's WDC latest investment of 23.5 billion baht ($693 million) to expand its manufacturing capabilities in Thailand has been approved by the nation’s Board of Investment (“BOI”), according to a Reuters report.
Per the report, BOI added that the investment is expected to contribute an additional 200 billion baht per year in exports. In addition to the economic benefits, the expansion is likely to generate 10,000 new job opportunities, adding to the robust 28,000 workforce that Western Digital currently employs in Thailand, stated BOI.
Thailand has been a global hub for HDD manufacturing, with the country producing about 80% of the world’s hard drives. Over the past decade, the country has welcomed 82.6 billion baht worth of investments in this sector. In 2023, Seagate, a prominent player in the HDD market, announced a 16 billion baht expansion of its operations in Thailand. Witnessing the current trend, BOI estimates the total investment applications to reach 800 billion baht by the end of 2024, added Reuters.
San Jose, CA-based Western Digital specializes in developing and manufacturing data storage devices and solutions based on NAND flash and hard disk drive technologies. It provides a wide range of HDD and Flash storage solutions used in desktop PCs, servers, network-attached storage devices, video game consoles, digital video recorders and a host of other consumer electronic devices.
WDC Gaining From Higher Nearline Demand
In the last reported quarter, WDC’s revenues jumped 41% year over year to $3.76 billion, driven by healthy growth across Cloud end markets. For fiscal 2024, revenues rose 6% year over year to $13 billion. Revenues from the Cloud, Client and Consumer end markets were up 89%, 16% and 5%, respectively. Sales from the Cloud end market rose due to higher demand for its nearline HDDs and enterprise SSDs, along with improved pricing. Higher flash ASPs cushioned both Client and Consumer end-market segments.
Management also highlighted a 60% sequential increase in demand for solid-state drives (SSD) powered by AI-related workloads. Per a report from Mordor Intelligence, the SSD market is anticipated to witness a CAGR of 17.6% during 2024-2029. WDC expects SSD enterprise to comprise a double-digit percent share in the portfolio for the fiscal 2025.
For first-quarter fiscal 2025, it projects non-GAAP revenues between $4 billion and $4.2 billion, Flash revenues to witness mid-to-high teens growth sequentially owing to continued innovation in SSD offerings and momentum in mobile and the HDD segment to gain from the rapid adoption of the SMR product portfolio.
WDC currently carries a Zacks Rank #3 (Hold). In the past year, WDC shares have gained 55.4% compared with the sub-industry’s growth of 77.5%.
Stocks to Consider
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Arista Networks supplies products to a prestigious set of customers, including Fortune 500 global companies in markets like cloud titans, enterprises, financials and specialty cloud service providers. It delivered a trailing four-quarter average earnings surprise of 15.02%. In the last reported quarter, Arista delivered an earnings surprise of 8.25%.
Harmonic enables media companies and service providers to deliver ultra-high-quality broadcast and OTT video services to consumers globally. HLIT delivered a trailing four-quarter average earnings surprise of 32.5%.
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