Western Digital considering flash and HDD spinouts • The Register

Western Digital has confirmed that its board is considering “strategic alternatives” for the storage provider, including spinning off its flash and hard drive businesses.

This follows calls last month from activist investor Elliott Management, which has amassed a $1 billion investment in WD, which equates to a 6 percent stake, for a “full divestiture” based on those product lines.

In a statement, CEO David Goeckeler said, “The Board believes that maximizing value creation warrants a comprehensive evaluation of strategic alternatives focused on structural options for the company’s Flash and HDD businesses.

“Through this process, we are actively participating in a wide range of strategic and financial alternatives that will help further optimize Western Digital’s value, including Elliott’s offer to invest additional equity in our flash business.”

In its May open letter to WD, Elliott Management pledged to provide more than $1 billion in “incremental equity” for the flash operation, which it acquired nearly six years ago when it bought SanDisk for $19 billion.

In response, Jesse Cohn, Managing Partner and Senior Portfolio Manager at Elliott Management said, “We are encouraged by the positive direction of our discussions to date and by Western Digital’s openness to considering a full divestiture of its flash business. Who We Are I am pleased that Western Digital’s board of directors is conducting this review, and Elliott stands ready to provide strategic resources and additional capital to help the company realize the full value of its two businesses.”

The announcement came as WD executives courted investors at the Goldman Sachs Global Semiconductor conference. Goeckeler spoke about the improvements he’s made since joining the company in 2020, including the separation of the HDD and flash businesses, the Kioxia joint venture, the share price rising from $3 to $8 during his tenure and product innovation – a word he mentioned 28 times during the meeting.

sister publication blocks & files has previously addressed how Goeckeler has helped turn WD’s fortunes since joining the company.

So it looks like Elliott Management and WD’s board of directors are playing well, at least for now, which is likely a better alternative to its fractious ties with its second-largest investor. The Vanguard Group owns an 11 percent stake in WD, making it number one. ®

About Willie Ash

Check Also

MediaTek Genio 1200 Linux System-on-Module supports Cortex-A78/A55 AIoT development kit

ADLINK Technology just introduced the SMARC 2.1 compliant LEC-MTK-I12000 System-on-Module (SoM) powered by a MediaTek …