Western Digital Corp at Nasdaq London Investor Conference Summary

The following is excerpted from the question-and-answer section of the transcript.

Question: Erik Woodring - Morgan Stanley - Analyst : <_ALACRA_META_ABSTRACT>Perfect. Awesome. Thank you guys for joining today. I figured we'll start at the very top and Irving. Demand for ACDs is very strong right now. You've kind of conveyed a lot of messages around demand strength and visibility. I'd love to understand at a more granular level why demand is so strong, meaning are these some of these new AI video platforms supporting incremental strength in HDDs? Is it companies projecting out kind of token growth? What is it exactly that -- it feels like over the last three months, demand has really kind of ticked up. Why is that?

Question: Erik Woodring - Morgan Stanley - Analyst : Okay. Okay. And then when we talk about AI as an incremental HDD demand driver, we don't necessarily see or see a number of, like, what I would call AI-native vendors or neoclouds or AI labs coming to market necessarily with huge HDD orders. Just what do you hear from them in terms of their storage architecture? Because seemingly, that is a large kind of new market, clearly, AI-centric. What's the message you'd send on demand coming from those players?

Question: Erik Woodring - Morgan Stanley - Analyst : Okay. Okay. So maybe, Kris, will bring you into the conversation as well with you even what does -- ultimately, my question is, what does that mean if we think about exabyte growth in kind of the time frame that you laid out at your Analyst Day earlier this year. You kind of outlined an exabyte growth CAGR of between 15% and 23%, 15% with your CSPs, kind of 8 points of AI potential upside. Is there an upward bias to this metric? LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. DECEMBER 09, 2025 / 8:30AM, WDC.OQ - Western Digital Corp at Nasdaq London Investor Conference Just how do we think about it, again, just given what we hear about HDD demand being so strong?

Question: Erik Woodring - Morgan Stanley - Analyst : Okay. And I want to also make sure we touch on supply, a hotly debated topic in the market. You guys -- the industry alongside yourselves, have been very disciplined with supply. Maybe for the benefit of the audience, I know you get the question of would you expand supply, would you expand unit supply. Maybe the way I want to ask it is, is there something that could convince you to expand unit supply above and beyond where the run rate is? And what would that be if there was anything?

Question: Erik Woodring - Morgan Stanley - Analyst : Okay, which makes a ton of sense. And we'll kind of get into areal density and technology innovation. I'd love to better understand -- so we've kind of talked high level demand. We just addressed supply, at least unit supply. When it comes to the totality of the interaction of those two sides of the market, how do we think about supply growth into calendar '26 and into calendar '27 because you are coming out with new technology, you're moving up the aerial density curve. LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. DECEMBER 09, 2025 / 8:30AM, WDC.OQ - Western Digital Corp at Nasdaq London Investor Conference So seemingly, you should be able to meet the shortages better as you move along through this technology innovation curve. So just before we get into the specifics of the actual technology, just how do we think about the ramp in supply from your perspective from this year into the next year?

Question: Erik Woodring - Morgan Stanley - Analyst : Right. Okay. Okay. So I don't I was going to ask you a question on that, but I'll stay to my track, which is going back to maybe the comment you made earlier, Irving, about visibility. So you generally have nearline bits accounted for from your top five customers. You have one customer through calendar '27. Can you maybe just elaborate, one, is that kind of the totality of the visibility that you have today? And really, the second part of that is how do you protect yourselves from the risk of kind of over or double ordering from those customers? Because clearly, if they want bits, they'll try to get the bits from you, but you don't want to create an industry glut. So how do you protect yourself?

Question: Erik Woodring - Morgan Stanley - Analyst : And the other side of that is it just even fascinating to me that your customers are giving you that level of visibility. Historically, you could argue the CSPs weren't always the most accurate forecasters of their own demand. What do you hear from them? Why are they giving you this level? Is it purely a supply-driven dynamic? Or is it more to that?

Question: Erik Woodring - Morgan Stanley - Analyst : Okay, no, that's helpful. So let's move to the technology innovation side of things. It's a kind of exciting time we've, for the entirety of my coverage, we kind of the time covering the space. We, we've heard about Hammer coming and Now you pknow it's here on the cusp, and so I believe you know at Western Digital you are qualifying up to 36 terabyte ltra SMR in the first quarter of next year, launching that in the second half of next calendar year, and then qualifying Hammer next year to launch in volume in the first half of calendar 27. LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. DECEMBER 09, 2025 / 8:30AM, WDC.OQ - Western Digital Corp at Nasdaq London Investor Conference Have any of those targets shifted? Any change in how to think about the qualification process? And lastly, when you say in volume, I think there's a specific, focus when you say in volume because you want to ship at least a million units per quarter at least. So just unpack all of that.

Question: Erik Woodring - Morgan Stanley - Analyst : Right. Okay. And maybe as a follow-up, this is a question I get fairly often. You might have just answered it, but I want to give you the dance what I answer this specifically, which is there's an investor debate whether your competitors coming to market with HAMR before you guys put you at a competitive disadvantage because you couldn't technically deliver the same TCO. What would be your rebuttal or help us better understand why not being first to market in HAMR doesn't put you at a competitive disadvantage? LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. DECEMBER 09, 2025 / 8:30AM, WDC.OQ - Western Digital Corp at Nasdaq London Investor Conference

Question: Erik Woodring - Morgan Stanley - Analyst : Okay. So let's kind of bring demand supply, technology innovation altogether, at least pricing in the same model that you introduced back in February. You had talked about price per exit by being kind of down 7%-ish in your model. Recently, it's been flattish. And so -- maybe talk about the difference between the forecast and what's actually happening in your model today. And if we then look out over a few years, is down 7% annual price deflation per exabyte. Is that too aggressive? Just how should we think about that as you've kind of learned more about the market in the last eight months.

Question: Erik Woodring - Morgan Stanley - Analyst : Exactly. And maybe a follow-up to that is just like how are your customers responding to all of this, right? It's a big change in the market where there's a lot of demand, supply shortages, pricing is increasing as opposed to going through cycles of deflation. Is there frustration? Or what are they communicating to you guys on the other end when you talk about longer lead times, pricing increases? How do you make sure that they stay happy? LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. DECEMBER 09, 2025 / 8:30AM, WDC.OQ - Western Digital Corp at Nasdaq London Investor Conference

Question: Erik Woodring - Morgan Stanley - Analyst : Okay. Okay. Now, let's touch on maybe another risk, which is kind of long-term disruption from ESSD. There's concerns in the market about supply shortages causing rearchitecting. I'd love if you could address that. And then, we've heard from some of the large NAND players that we will be able to have multiple versions of technology innovation from now, a point at which ESSD is price competitive with HDD, not calling for the death of HDD, but you see where the question is going. I'd love if you can maybe address the rearchitecting risk and then maybe the longer-term risk of disruption.

Question: Erik Woodring - Morgan Stanley - Analyst : So last two, quickly, Kris, for you. Last quarter in September, price per exabyte grew 1% sequentially. Cost per exit was down about 4% sequentially. Is there a path where we can be looking at 50% plus gross margins in the not-too-distant future in the foreseeable future as you continue to kind of hold pricing steady, but mix down or mix up into these higher capacity drives, to help that cost per terabyte keep moving lower?

Question: Erik Woodring - Morgan Stanley - Analyst : Okay. And an asset that I think investors don't maybe fully appreciate that you guys have is 7.5 million shares of SanDisk. Over the last few months that ownership for that stake has increased materially. You've expressed a clear indication that you want to sell that tax-free by, I think, it's February 21, the year anniversary of the spin. Does all of that go to delevering? Can you buy out some of the convert? Just how are you going to use that? Because obviously, more than $1.5 billion is much larger than the $300 million that it was three or four months ago.

Question: Erik Woodring - Morgan Stanley - Analyst : And maybe last thing before we depart, Irving, just anything that you can share with us about maybe what you think is most underappreciated about the Western Digital story?

Question: Erik Woodring - Morgan Stanley - Analyst : Right. And I'll give you the quick plug of the February 3 investor Investor Innovation Day, but we are out of time. So with that, Irving, Kris, thank you very much. Thank you guys, for attending.