AR and VR will be incorporated in many of those consumer devices and cells phones and will lead to increased demand for both memory and storage.
Which devices are you talking about? If its cell phones or PCs, they already have plenty of storage.
Autos have more electronics in them with each passing year, not even counting autonomous vehicles.
Be specific. If 8 million autos 3-4 years from now are autonomously driven autos, how many GB of storage do you think each auto will consume. We're talking memory, not electronics.
Autos as a unit driven market is nothing compared to cell phones and PCs.
Do you think each auto will require 1TB of storage? Why? It would seem to make more sense to have the required info stored in the cloud, and the auto connects to the cloud. Even if every autonomous auto required 1TB of storage, and there are 10 million of them sold per year, that's 10 million big time hard disks. At $1,000 a pop, that's $10 billion in storage sales. At 30 % gross margin, that's $3 billion gross profit. WDC lost $$600 million in gross profits in the move from Q3 to Q4. You think autonomous autos - when they finally become a reality - matter if they only add $3 billion of gross profit to the industry?
Face it - PCs and cell phone are used by almost EVERY HUMAN on the planet. Your other categories devices are unlikely to be anywhere near those two devices in terms of adoption and memory consumption.
Why would WDC dump their internal controller program just when it is bearing fruit? That makes no sense to me.
Yes, it seems they are dumping their Malaysian disk drive factory, so their Op Ex reduction has nothing to do with their internal controller program. WDC will only dump their internal controller program if they believe paying SIMO's 50% gross margin is cheaper than doing it themselves (and paying their employees). Time will tell. SIMO can make a controller and sell it to many companies, amortizing expenses. WDC can make a controller, and only consume it themselves. Which is cheaper (for WDC), we shall see as time plays out.
But if WDC's NAND business gets worse and worse, the controller division (headcount, hiring, pensions, whatever) may some day go on the chopping block. Gotta cut somewhere.....
Now Mr. Market is calling a bottom.
Today. You want to buy WDC today at $47? I'm amazed. I wonder if WDC will head towards bankruptcy in 2020, but what do I know? |
