WD maintains position as world's second largest hard drive manufacturer

Lake Forest (CA) - Western Digital (WD) profited from the increased demand in the hard drive market and mentioned that it has shipped 24.5 million units in the fourth quarter of 2006, up 35% from the year-ago quarter. Revenues were up from $1.1 billion in Q4 2005 to $1.4 billion in Q4 2006. Net income climbed 23% from $104 million to $128 million in the same time frame.

WD said that 57% of revenues came from traditional 3.5" desktop hard drives, while 42% came from developing market segments, such as portable 2.5" drives. This compares with a mix in the year-ago quarter of 26% newer markets versus 74% desktop PC revenue in Q4 of last year, which highlights a quickly increasing demand in consumer electronics and portable storage applications : WD said that shipped 2.7 million 2.5" mobile drives and 2.7 million 3.5" units for the PVR/DVR market, compared with 1.4 million and 1.5 million, respectively, a year ago.

This growth has allowed WD to develop into a major player in the hard drive industry that now holds a war chest of cash and short-term investments worth about $830 million.

However, WD, which does not developer hard drive platter technologies by itself but rather relies on third party shipments from companies such as Showa Denko, cannot reach the market reach of market leader Seagate at this time. The company recently posted Q4 revenues of $3.0 billion and profits $140 million. Seagate shipped 41 million drives during Q4 2006.