威騰電子 (WDC) 2020 Q4 法說會逐字稿

Ladies and gentlemen, thank you for standing by, and welcome to Western Digital's Fourth Quarter Fiscal 2020 Conference Call. (Operator Instructions)

女士們，先生們，感謝你們的支持，歡迎參加西部數據 2020 財年第四季度電話會議。 （操作員說明）

I would now like to hand the conference over to your speaker, Mr. Peter Andrew, Vice President of Investor Relations. Please go ahead, sir.

我現在想把會議交給你的演講者，投資者關係副總裁彼得安德魯先生。請繼續，先生。

Thank you, and good afternoon, everyone. Joining me today are David Goeckeler, Chief Executive Officer; and Bob Eulau, Chief Financial Officer.

謝謝大家，大家下午好。今天加入我的是首席執行官 David Goeckeler；和首席財務官 Bob Eulau。

Before we begin, let me remind everyone that today's discussion contains forward-looking statements, including product portfolio expectations, business plans, trends and financial outlook based on management's current assumptions and expectations and, as such, does include risks and uncertainties. We assume no obligation to update these statements. Please refer to our most recent financial report on Form 10-Q filed with the SEC for more information on the risks and uncertainties that could cause actual results to differ materially.

在開始之前，讓我提醒大家，今天的討論包含前瞻性陳述，包括基於管理層當前假設和預期的產品組合預期、業務計劃、趨勢和財務前景，因此確實包括風險和不確定性。我們不承擔更新這些聲明的義務。請參閱我們最近向美國證券交易委員會提交的表格 10-Q 財務報告，了解有關可能導致實際結果出現重大差異的風險和不確定性的更多信息。

We will also make references to non-GAAP financial measures today. Reconciliations between the non-GAAP and comparable GAAP financial measures are included in the press release and other materials that are being posted in the Investor Relations section of our website.

今天，我們還將參考非公認會計準則財務指標。非 GAAP 和可比 GAAP 財務措施之間的對賬包含在新聞稿和我們網站投資者關係部分發布的其他材料中。

With that, I will now turn the call over to David.

有了這個，我現在將把電話轉給大衛。

Thanks, Peter, and thanks, everyone, for joining us this afternoon to discuss our fourth quarter and fiscal year 2020 results. I hope that you and your families are staying healthy and safe.

謝謝彼得，也謝謝大家今天下午加入我們討論我們第四季度和 2020 財年的業績。我希望您和您的家人保持健康和安全。

As I reflect on my first full quarter as CEO of Western Digital, I am extremely proud of the way our team has navigated the complexities and uncertainties inherent in this unprecedented environment. As a company, we continue to adapt to provide continuity and high-quality products for our customers, deliver value to our shareholders and, importantly, prioritize the health and safety of our employees. We have a unique view into many drivers and trends that play both domestically and internationally due to the breadth of our portfolio of innovative flash and hard drive solutions going into cloud, OEM channel and retail end markets. We look at our business holistically, but it is especially important now to understand the nuances, challenges and opportunities in each market we serve.

當我回顧我作為西部數據首席執行官的第一個完整季度時，我為我們的團隊在這種前所未有的環境中應對固有的複雜性和不確定性的方式感到非常自豪。作為一家公司，我們不斷適應為我們的客戶提供連續性和高質量的產品，為我們的股東創造價值，更重要的是，我們優先考慮員工的健康和安全。由於我們在雲、OEM 渠道和零售終端市場的創新閃存和硬盤驅動器解決方案組合的廣泛性，我們對國內和國際上的許多驅動因素和趨勢有獨特的看法。我們從整體上看待我們的業務，但現在了解我們所服務的每個市場的細微差別、挑戰和機遇尤為重要。

So before we dig into the results for the quarter and full year, I want to talk about how the COVID-19 pandemic and other macro trends are impacting the business. I'll then update you on how we are thinking about our strategic priorities for the fiscal year 2021, before turning it over to Bob for a financial update, which will be followed by Q&A.

因此，在我們深入研究本季度和全年的結果之前，我想談談 COVID-19 大流行和其他宏觀趨勢如何影響業務。然後，我將向您介紹我們如何考慮 2021 財年的戰略重點，然後將其交給 Bob 進行財務更新，隨後將進行問答。

Western Digital has successfully managed through this unpredictable time with limited business impact from the pandemic. We made important investments and changes to minimize manufacturing and logistical challenges that were primarily impacting our hard drive business. Bob will discuss the financial impact of these later in the call. And we have maintained our focus on delivering for customers throughout.

西部數據成功地度過了這個不可預測的時期，而疫情對業務的影響有限。我們進行了重要的投資和改變，以盡量減少主要影響我們硬盤業務的製造和物流挑戰。 Bob 將在稍後的電話會議中討論這些對財務的影響。我們始終專注於為客戶提供服務。

From an end market standpoint, demand was mixed in the quarter. And if there's a common theme among our end markets, it's uncertainty. In the second half of fiscal 2020, customers were focused on ensuring they had enough supply to meet heightened demand. As expected, demand in our cloud business was strong due to the work-from-home trend. At the same time, healthy demand for our flash-based notebook solutions drove record revenue in our OEM end market. Finally, in retail, while we have a robust distribution channel with over 350,000 points of purchase around the world and well-established brands, we were impacted by COVID-related lockdowns at many of our brick-and-mortar customers. We did see the business recover as the quarter progressed due to easing of lockdowns and the transition to online buying with curbside pickup.

從終端市場的角度來看，本季度的需求喜憂參半。如果我們的終端市場有一個共同的主題，那就是不確定性。在 2020 財年下半年，客戶專注於確保他們有足夠的供應來滿足日益增長的需求。正如預期的那樣，由於在家工作的趨勢，我們的雲業務需求強勁。與此同時，對我們基於閃存的筆記本電腦解決方案的健康需求推動了我們 OEM 終端市場的創紀錄收入。最後，在零售方面，雖然我們擁有強大的分銷渠道，在全球擁有超過 350,000 個購買點和知名品牌，但我們的許多實體客戶都受到了與 COVID 相關的封鎖的影響。由於封鎖的放鬆以及向路邊取貨的在線購買過渡，我們確實看到該季度的業務有所復甦。

As we look to the first half of fiscal 2020, one, uncertainty remains. We remain vigilant given the resurgence of the virus and its potential to disrupt our supply chain, including our ability to keep full teams working in our manufacturing facilities. Apart from COVID-19, we're managing through other macro trends. The global economic contraction is generally -- is generating an uncertain demand environment, and we are closely monitoring trade-related geopolitical developments, which are pertinent to a global business like ours. These near-term headwinds will eventually subside, and we are confident that the strength of our portfolio and strong customer relationships are well aligned to where the growth is, in the cloud and on the edge. We've continued to make strategic technology and product investments in both flash and hard drives to drive long-term revenue growth and gross margin expansion.

展望 2020 財年上半年，不確定性依然存在。鑑於該病毒的捲土重來及其破壞我們供應鏈的潛力，包括我們讓整個團隊在我們的製造設施中工作的能力，我們保持警惕。除了 COVID-19，我們還通過其他宏觀趨勢進行管理。全球經濟收縮通常會產生不確定的需求環境，我們正在密切關注與貿易相關的地緣政治發展，這與我們這樣的全球企業有關。這些近期的不利因素最終會消退，我們有信心，我們的投資組合實力和強大的客戶關係與雲和邊緣的增長點完全吻合。我們繼續在閃存和硬盤驅動器方面進行戰略性技術和產品投資，以推動長期收入增長和毛利率擴張。

Now turning to our financial results. In the fourth quarter, results were generally in line with our guidance. We achieved this while partially offsetting higher-than-anticipated COVID-19-related costs, which Bob will discuss in more detail. We reported revenue of $4.3 billion and non-GAAP earnings per share of $1.23, mainly driven by growth in the cloud and record results for our client SSD portfolio for notebooks.

現在轉向我們的財務業績。第四季度業績總體符合我們的預期。我們實現了這一目標，同時部分抵消了高於預期的 COVID-19 相關成本，鮑勃將對此進行更詳細的討論。我們報告的收入為 43 億美元，非 GAAP 每股收益為 1.23 美元，主要受雲增長和我們的筆記本電腦客戶 SSD 產品組合的創紀錄業績推動。

Looking back at the full fiscal year 2020, I am pleased with our performance. Our end market diversity and breadth, broad customer base, channel reach and innovative leadership all positioned Western Digital to benefit from the multiyear growth in data creation and storage. For fiscal 2020, revenue totaled $16.7 billion, and we reported non-GAAP earnings per share of $3.04. We continue to align our portfolio with a sharp focus on growth and margin improvement.

回顧整個 2020 財年，我對我們的表現感到滿意。我們的終端市場多樣性和廣度、廣泛的客戶群、渠道覆蓋範圍和創新領導力都使西部數據受益於數據創建和存儲的多年增長。 2020 財年，收入總計 167 億美元，我們報告的非公認會計準則每股收益為 3.04 美元。我們繼續調整我們的投資組合，將重點放在增長和利潤率提高上。

Importantly, over the last year, we brought to market several exciting new innovations across both flash and hard drives that I'd like to touch upon.

重要的是，在過去的一年裡，我們在閃存和硬盤驅動器方面帶來了一些令人興奮的新創新，我想談一談。

Starting with flash. As you know, we believe flash is the greatest long-term growth opportunity for Western Digital and is an area where we've already had a tremendous foundation with consumer cards, USB drives and client and enterprise SSDs. As I mentioned on the Q3 call, the migration to flash within game consoles is yet another example of flash penetrating deeper into the edge and endpoint. The adoption of 5G and the build-out of the edge to support a new generation of real-time services is another exciting development. We see an expanding TAM for flash that underpins a multiyear growth opportunity.

從閃光燈開始。如您所知，我們相信閃存是西部數據最大的長期增長機會，並且我們已經在消費卡、USB 驅動器以及客戶端和企業級 SSD 方面打下了堅實的基礎。正如我在 Q3 電話會議上提到的，向遊戲機內的 Flash 遷移是 Flash 深入邊緣和端點的又一個例子。採用 5G 和構建邊緣以支持新一代實時服務是另一個令人興奮的發展。我們看到閃存的 TAM 不斷擴大，這支撐了多年的增長機會。

To capitalize on this opportunity, we launched BiCS5, our 112-layer flash product in retail last quarter, which delivers exceptional capacity, performance and reliability, all at an attractive cost. The ramp has gone very well with impressive yields, and we are just at the beginning stages of this product ramp. While we focus on ramping BiCS5, BiCS4 has continued to provide the right balance of performance and cost reduction. BiCS4 represented over 60% of bits shipped in the quarter.

為了利用這個機會，我們在上個季度推出了零售的 112 層閃存產品 BiCS5，它以極具吸引力的成本提供了卓越的容量、性能和可靠性。坡道進展順利，產量令人印象深刻，我們正處於該產品坡道的開始階段。在我們專注於提升 BiCS5 的同時，BiCS4 繼續提供性能和成本降低之間的適當平衡。 BiCS4 佔本季度出貨量的 60% 以上。

Earlier this year, we celebrated the first production wafer shipment from our K1 fab, our new manufacturing facility for 3D BiCS flash memory. This is another important milestone reflecting the successful 20-year partnership we've had with Kioxia. Another major highlight has been the ramp of our enterprise SSD product line. Enterprise SSD revenue in the quarter grew nearly 70% sequentially, and our revenue share increased to the low double digits. This will remain an important area of focus within our flash portfolio.

今年早些時候，我們慶祝了 K1 工廠的第一批生產晶圓出貨，這是我們用於 3D BiCS 閃存的新製造工廠。這是另一個重要的里程碑，反映了我們與鎧俠 20 年成功的合作夥伴關係。另一個主要亮點是我們企業級 SSD 產品線的升級。本季度企業級 SSD 收入環比增長近 70%，我們的收入份額增長至兩位數的低位。這仍將是我們閃存產品組合中的一個重要重點領域。

Now turning to hard drives. We continue to lead the industry in aerial density using innovations across the entire drive, algorithms, firmware, mechanical heads and media. We were the first in the industry to ship energy-assisted drives for mass production and expect a strong ramp into the fiscal second quarter and beyond. In short, we are going through important product transitions in both our flash and HDD businesses that we think set up Western Digital well for the future.

現在轉向硬盤。我們在整個驅動器、算法、固件、機械磁頭和介質上進行創新，繼續在空中密度方面處於行業領先地位。我們是業內第一家為大規模生產提供能量輔助驅動器的公司，並預計將在第二財季及以後強勁增長。簡而言之，我們的閃存和 HDD 業務正在經歷重要的產品轉型，我們認為這些轉型為西部數據的未來奠定了良好的基礎。

Recognizing that these are uncertain times, we believe that the most important thing we can do is keep our foot on the proverbial innovation pedal and execute on the road map across the business. We have an extremely talented team working on new products that will continue to drive leadership in flash and hard drives.

認識到現在是不確定的時期，我們相信我們能做的最重要的事情就是腳踏實地的創新踏板，並在整個業務的路線圖上執行。我們擁有一支才華橫溢的團隊，致力於開發新產品，這將繼續推動閃存和硬盤驅動器的領導地位。

Looking ahead, our strategic priorities are centered around driving innovation for customers and value for shareholders. First and foremost, we will focus on driving long-term shareholder value as we bolster our flash and HDD portfolios, including ramping 2 important product lines to high volume, our SSD products and our energy-assisted capacity enterprise drives. Secondly, we will accelerate our transition to BiCS5, delivering additional performance for our customers and notable cost advantages for Western Digital. Third, we will continue to sharpen our execution from a product road map and strategic business objectives. And finally, we are evolving our portfolio to drive growth, margin improvement and cash generation while also paying down debt and investing in the future. In the near term, we expect to remain challenged by the pandemic and the global economic contraction. Internally, we're also navigating multiple substantial product transitions, which will require sharp execution focus. But we are very confident they will set us up well for the long term.

展望未來，我們的戰略重點圍繞為客戶推動創新和為股東創造價值。首先，我們將專注於推動長期股東價值，同時加強我們的閃存和 HDD 產品組合，包括將 2 條重要的產品線提升到大容量、我們的 SSD 產品和我們的能源輔助容量企業驅動器。其次，我們將加快向 BiCS5 的過渡，為我們的客戶提供額外的性能，並為西部數據帶來顯著的成本優勢。第三，我們將繼續加強產品路線圖和戰略業務目標的執行。最後，我們正在發展我們的投資組合，以推動增長、提高利潤率和產生現金，同時還清債務並投資於未來。在短期內，我們預計將繼續受到大流行和全球經濟收縮的挑戰。在內部，我們也在進行多次重大的產品轉換，這將需要高度關注執行。但我們非常有信心，他們會讓我們長期保持良好狀態。

With that, I'll turn the call over to Bob to share our financial highlights and outlook.

有了這個，我將把電話轉給鮑勃，分享我們的財務亮點和前景。

Thanks, Dave, and good afternoon, everyone. As Dave mentioned, the COVID-19 pandemic has created a challenging global economy that has continued to impact Western Digital's performance, in large part due to the high level of uncertainty that both we and our customers are facing. While this uncertainty isn't going away in the near term, we'll continue to adapt, and we believe Western Digital is well positioned for the future.

謝謝，戴夫，大家下午好。正如 Dave 所提到的，COVID-19 大流行創造了一個充滿挑戰的全球經濟，並繼續影響 Western Digital 的業績，這在很大程度上是由於我們和我們的客戶都面臨著高度的不確定性。雖然這種不確定性在短期內不會消失，但我們將繼續適應，我們相信西部數據已為未來做好準備。

With that, I'll walk you through our fourth quarter and fiscal year 2020 results. For the fourth quarter, revenue was $4.3 billion, up 3% sequentially and up 18% from a year ago. Non-GAAP earnings per share was $1.23. For the full fiscal year, revenue was $16.7 billion, up 1% from fiscal 2019, and non-GAAP EPS was $3.04.

有了這個，我將帶你了解我們第四季度和 2020 財年的業績。第四季度收入為 43 億美元，環比增長 3%，同比增長 18%。非公認會計原則每股收益為 1.23 美元。整個財年的收入為 167 億美元，比 2019 財年增長 1%，非美國通用會計準則每股收益為 3.04 美元。

Looking at end market. Client Devices revenue was $1.9 billion, up 5% on a sequential basis and up 19% year-over-year. Within this end market, our robust family of client SSDs, which are ideally suited for remote learning and work-from-home applications, achieved another record quarter of revenue. Notebook and desktop-related hard drive revenue declined slightly sequentially as the market continued to transition to SSD-based products. Smart video was weaker than our expectations due to continued headwinds associated with the pandemic. In gaming, we began shipping our flash solutions for the upcoming new game console launches. And finally, mobile flash revenue was down sequentially, but up year-over-year off a low base.

看終端市場。客戶端設備收入為 19 億美元，環比增長 5%，同比增長 19%。在這個終端市場中，我們強大的客戶端 SSD 系列非常適合遠程學習和在家工作應用程序，實現了另一個創紀錄的季度收入。隨著市場繼續向基於 SSD 的產品過渡，筆記本和台式機相關硬盤收入環比略有下降。由於與大流行相關的持續逆風，智能視頻弱於我們的預期。在遊戲方面，我們開始為即將推出的新遊戲機發布我們的閃存解決方案。最後，移動閃存收入環比下降，但在低基數的基礎上同比增長。

Moving on to Data Center Devices and Solutions. Fourth quarter revenue was a record $1.7 billion, up 11% sequentially and up 32% year-over-year. For the full fiscal year, revenue of $6.2 billion was up 24% from fiscal year 2019. Capacity enterprise hard drive revenue was down slightly on a sequential basis, while enterprise SSD revenue grew nearly 70% sequentially and more than doubled from a year ago.

轉向數據中心設備和解決方案。第四季度收入達到創紀錄的 17 億美元，環比增長 11%，同比增長 32%。整個財年，收入為 62 億美元，比 2019 財年增長 24%。容量企業硬盤收入環比略有下降，而企業 SSD 收入環比增長近 70%，比一年前翻了一番多。

Next, Client Solutions revenue was $687 million, down 16% sequentially and down 9% year-over-year due to COVID-19-related lockdowns. Despite this, we were encouraged to see demand pick up in June as countries began to ease lockdown restrictions and as brick-and-mortar locations shifted more of their operations online. This strength continued into July. Given the unprecedented circumstances, we executed very well in this business in a difficult environment. With over 350,000 points of purchase around the world, we continue to have incredibly strong distribution breadth and brand recognition.

接下來，由於與 COVID-19 相關的封鎖，客戶解決方案收入為 6.87 億美元，環比下降 16%，同比下降 9%。儘管如此，隨著各國開始放寬封鎖限制以及實體店將更多業務轉移到網上，我們感到鼓舞的是，6 月份的需求回升。這種力量一直持續到七月。鑑於前所未有的情況，我們在困難的環境中在這項業務中執行得非常好。我們在全球擁有超過 350,000 個購買點，我們繼續擁有令人難以置信的強大分銷廣度和品牌知名度。

Turning to revenue by product category. Flash revenue was $2.2 billion, up 9% sequentially and up 49% year-over-year. Flash ASPs were up 1% sequentially on a blended basis and up 3% on a like-for-like basis. Bit shipments were up 8% sequentially. Hard drive revenue was $2.1 billion, down 3% sequentially and down 4% year-over-year. Total exabyte shipments were down 2%. On a sequential basis, the average price per hard drive increased 2% to $87 as mix continued to shift to the cloud.

轉向按產品類別劃分的收入。 Flash 收入為 22 億美元，環比增長 9%，同比增長 49%。 Flash ASP 在混合基礎上環比增長 1%，在同類基礎上增長 3%。位出貨量環比增長 8%。硬盤收入為 21 億美元，環比下降 3%，同比下降 4%。艾字節總出貨量下降了 2%。隨著混合繼續向雲端轉移，每個硬盤的平均價格環比上漲 2% 至 87 美元。

As we move on to cost and expenses, please note all of my comments will be related to non-GAAP results, unless stated otherwise. Gross margin for the fourth quarter was up 1 percentage point sequentially to 28.9%, slightly below our guidance range. The major item that impacted our gross margin was COVID-19-related costs of $96 million. This almost exclusively impacted hard drives -- the hard drive business and was primarily related to reduced factory utilization and higher logistics costs. For clarity, this item was included in our non-GAAP gross margin.

當我們繼續討論成本和費用時，請注意我的所有評論都將與非公認會計原則結果相關，除非另有說明。第四季度毛利率環比增長 1 個百分點至 28.9%，略低於我們的指導範圍。影響我們毛利率的主要項目是與 COVID-19 相關的 9600 萬美元成本。這幾乎完全影響了硬盤——硬盤業務，主要與工廠利用率降低和物流成本增加有關。為清楚起見，該項目已包含在我們的非公認會計原則毛利率中。

Our flash gross margin was 30.5%, up 4 percentage points from last quarter due to cost reductions and slightly favorable pricing. Our hard drive gross margin was 27.2%, down 2.1 percentage points from the prior quarter. The biggest driver of the lower gross margin was the $96 million in COVID-19-related costs, representing a 4.7 percentage point impact on our hard drive gross margin.

由於成本降低和略微優惠的定價，我們的閃存毛利率為 30.5%，比上一季度上升 4 個百分點。我們的硬盤毛利率為 27.2%，比上一季度下降 2.1 個百分點。毛利率下降的最大驅動因素是與 COVID-19 相關的 9600 萬美元成本，對我們的硬盤毛利率產生了 4.7 個百分點的影響。

Operating expenses were $713 million, well below our guidance range, primarily due to our decision to cap variable compensation expense given the current economic environment. Non-GAAP earnings per share was $1.23. Operating cash flow for the fourth quarter was $172 million, and free cash flow was $261 million. In fiscal 2020, we generated $1.1 billion in free cash flow.

運營費用為 7.13 億美元，遠低於我們的指導範圍，主要是由於我們決定在當前經濟環境下限制可變薪酬費用。非公認會計原則每股收益為 1.23 美元。第四季度的經營現金流為 1.72 億美元，自由現金流為 2.61 億美元。在 2020 財年，我們產生了 11 億美元的自由現金流。

Capital expenditures, which include the purchase of property, plant and equipment and activity related to flash ventures on our cash flow statement, were an inflow of $89 million due to the timing of funds flowing to and from the joint ventures. In the fourth quarter, we distributed $150 million in dividends to our shareholders, which was our final distribution prior to suspending the dividend. We also made a standard $63 million debt repayment in the fourth quarter. I would note that we have already made an optional debt repayment of $150 million in July.

由於資金流入和流出合資企業的時間，資本支出（包括購買物業、廠房和設備以及與我們現金流量表上的閃速企業相關的活動）流入了 8900 萬美元。在第四季度，我們向股東分配了 1.5 億美元的股息，這是我們在暫停股息之前的最終分配。我們還在第四季度償還了標準的 6300 萬美元債務。我要指出的是，我們已經在 7 月份償還了 1.5 億美元的可選債務。

Our liquidity position continues to be strong. At the end of the quarter, we had $3 billion in cash and cash equivalents, and our gross debt outstanding was $9.7 billion. Our debt-to-EBITDA ratio was 4.2x in the fourth quarter. And our adjusted EBITDA leverage ratio, as defined in our credit agreement, was 2.8x. As a reminder, our credit agreement includes an approximate $1 billion in depreciation add back associated with the joint ventures, which is not reflected in our cash flow statement. Please refer to our earnings presentation on the Investor Relations website for further details.

我們的流動性狀況繼續強勁。在本季度末，我們擁有 30 億美元的現金和現金等價物，我們的未償債務總額為 97 億美元。我們第四季度的債務與 EBITDA 比率為 4.2 倍。根據我們的信貸協議，我們調整後的 EBITDA 槓桿比率為 2.8 倍。提醒一下，我們的信貸協議包括與合資企業相關的大約 10 億美元的折舊加回，這未反映在我們的現金流量表中。請參閱我們在投資者關係網站上的收益報告了解更多詳情。

Moving on to guidance for the fiscal first quarter. We are somewhat challenged in the near term as a result of the uncertainty of the pandemic and being in the midst of a global economic contraction. Despite this uncertainty, we continue to execute and focus on our great products, deep customer relationships and large and growing markets. We are working on a number of substantial product transitions that will set us up well for the long term.

繼續對第一財季的指導。由於大流行的不確定性和全球經濟收縮，我們在短期內會面臨一些挑戰。儘管存在這種不確定性，我們仍將繼續執行並專注於我們的優質產品、深厚的客戶關係以及龐大且不斷增長的市場。我們正在努力進行一些重大的產品過渡，這將使我們長期保持良好狀態。

We expect revenue in the first fiscal quarter to be in the range of $3.70 billion to $3.9 billion. Growth in Client Solutions is expected to be more than offset by a decline in both Data Center Devices and Solutions and Client Devices. We expect non-GAAP gross margin to be between 25% and 27%. This range includes approximately $80 million in costs associated with the K1 fab. This should be the peak quarter in fiscal 2021 for K1 period expenses. We expect operating expenses to be between $700 million and $720 million. Interest and other expense is expected to be between $70 million and $80 million. The tax rate is expected to be between 22% and 26% in Q1 and for the full fiscal year of 2021. We expect non-GAAP earnings per share to be between $0.45 and $0.65 in Q1, assuming approximately 304 million fully diluted shares.

我們預計第一財季的收入將在 37 億美元至 39 億美元之間。客戶端解決方案的增長預計將被數據中心設備和解決方案以及客戶端設備的下降所抵消。我們預計非美國通用會計準則毛利率將在 25% 至 27% 之間。這個範圍包括與 K1 晶圓廠相關的大約 8000 萬美元的成本。這應該是 2021 財年 K1 期間費用的高峰季度。我們預計運營費用將在 7 億美元至 7.2 億美元之間。利息和其他費用預計在 7000 萬美元至 8000 萬美元之間。預計第一季度和 2021 年整個財年的稅率將在 22% 至 26% 之間。假設大約 3.04 億股完全稀釋的股票，我們預計第一季度非公認會計準則每股收益將在 0.45 美元至 0.65 美元之間。

Gross capital expenditures, which includes our portion of the joint venture leasing and self-operating funding, is expected to be approximately $3.1 billion in fiscal year 2021. This includes approximately $1.3 billion in cash capital expenditures. We will continue to monitor capital expenditures very closely given the current business environment.

預計 2021 財年的總資本支出（包括我們的合資租賃和自營資金部分）約為 31 億美元。這包括約 13 億美元的現金資本支出。鑑於當前的商業環境，我們將繼續密切監控資本支出。

In summary, we are executing well in a challenging environment, and results are generally in line with our expectations. We are taking decisive steps to successfully navigate through the current macroeconomic environment while ensuring we focus our resources to address the significant long-term growth opportunities that are ahead.

總而言之，我們在充滿挑戰的環境中表現良好，結果總體上符合我們的預期。我們正在採取果斷措施，成功度過當前的宏觀經濟環境，同時確保我們將資源集中在應對未來重大的長期增長機會上。

I'll now turn it back over to Dave.

我現在把它還給戴夫。

Thanks, Bob. While we continue to navigate through a complex and dynamic environment, I am confident that Western Digital can lead the market for years to come. As I've said, I came here because I have a very strong conviction that Western Digital can play an increasingly vital role in the digital transformation, and that conviction has only strengthened in the past 5 months. We have deep flash and HDD product portfolio, operational scale and great customer relationships, combined with the ever-growing demand for data creation and storage.

謝謝，鮑勃。在我們繼續在復雜多變的環境中航行的同時，我相信西部數據能夠在未來幾年引領市場。正如我所說，我來到這裡是因為我非常堅信西部數據可以在數字化轉型中發揮越來越重要的作用，而且這種信念在過去 5 個月中才得到加強。我們擁有豐富的閃存和 HDD 產品組合、運營規模和良好的客戶關係，以及對數據創建和存儲不斷增長的需求。

All in all, it's a great place to be, and I'm extremely thankful for the hard work that our talented global team puts in on a day in and day out basis. We are operating in uncertain times, but Western Digital's strong, consistent performance reflects our ability to maintain our market leadership by delivering technological innovation with the quality, performance and cost effectiveness that our customers rely upon.

總而言之，這是一個很棒的地方，我非常感謝我們才華橫溢的全球團隊日復一日的辛勤工作。我們在不確定的時期運營，但西部數據強勁、始終如一的業績反映了我們通過提供具有客戶所依賴的質量、性能和成本效益的技術創新來保持市場領先地位的能力。

With that, I'll turn the call over to the operator to begin our Q&A.

有了這個，我將把電話轉給接線員開始我們的問答。

(Operator Instructions) Our first question will come from Wamsi Mohan with Bank of America.

（操作員說明）我們的第一個問題將來自美國銀行的 Wamsi Mohan。

I was hoping you could give us some sense on your 18-terabyte ramp. It appeared that you were expecting that ramp before in the September quarter. It looks like it might have been pushed out further. Can you talk about what's going on there? And I have a follow-up.

我希望你能給我們一些關於你的 18 TB 坡道的意義。看來您在 9 月季度之前預計會出現這種情況。看起來它可能已經被推得更遠了。你能談談那裡發生了什麼嗎？我有一個後續行動。

Yes. No, it hasn't pushed out. The ramp is on plan, as we've talked about. We plan on producing in excess of 1 million units this quarter. It's a very important quarter for us on that ramp, Wamsi, because it's the quarter where we get the yields up, which gets us the margin profile we need to go into the second quarter of the fiscal year at full production capacity. So it's on track where we want it to be. We feel good about it, and this is going to be an important quarter for us. But it's something we know how to do in ramping a drive platform.

是的。不，它沒有推出。正如我們已經談到的，坡道正在計劃中。我們計劃在本季度生產超過 100 萬台。對我們來說，這是一個非常重要的季度，Wamsi，因為這是我們提高產量的季度，這使我們獲得了進入本財年第二季度滿負荷生產所需的利潤率。所以它在我們想要的軌道上。我們對此感覺良好，這對我們來說將是一個重要的季度。但這是我們在提升驅動平台時知道如何做的事情。

Okay. And I was wondering if you can maybe bridge this quarter-on-quarter gross margin outlook, what the main puts and takes there are. How much are you thinking that the HDD side is going to contribute given that some of the capacity enterprise weakness was -- capacity enterprise seems like a little bit weaker than what people were thinking.

好的。我想知道你是否可以彌合這個季度環比毛利率前景，主要的投入和產出是什麼。鑑於容量企業的一些弱點——容量企業似乎比人們想像的要弱一點，你認為 HDD 方面會做出多少貢獻。

Yes. I'll make a few comments, and I'll turn it over to Bob to make a few comments. And I think if you look at gross margin going forward, there's a number of headwinds. We still have the COVID costs. We don't expect them to be as high next quarter as they were this quarter, but they're still there, the logistics cost, especially. It's just a very dynamic environment there that changes week by week. We've got the ramp of the 18-terabyte drive that we just talked about. So in the beginning phases of that ramp, you're going to -- it's a headwind on gross margin till we get up the ramp. That's why this is such an important quarter for us that we work through that. And as I said, that's on track. And then on flash, we've got an easing pricing environment. So that's going to impact gross margin there. Bob, any -- did I miss anything?

是的。我將發表一些評論，然後將其交給 Bob 發表評論。而且我認為，如果您看一下未來的毛利率，則會遇到許多不利因素。我們仍然有 COVID 費用。我們預計下一季度它們不會像本季度那樣高，但它們仍然存在，尤其是物流成本。這只是一個非常動態的環境，每週都在變化。我們已經有了剛才談到的 18 TB 驅動器的斜坡。所以在這個斜坡的開始階段，你會 - 在我們爬上斜坡之前，這是毛利率的逆風。這就是為什麼這對我們來說是一個如此重要的季度，我們會努力解決這個問題。正如我所說，這是在正軌上。然後在閃存上，我們有一個寬鬆的定價環境。所以這將影響那裡的毛利率。鮑勃，任何——我錯過了什麼嗎？

No. I think those are the keys. I mean on the hard drives, obviously, volumes are a little lower. So we'll be amortizing our fixed costs over a smaller volume as we go up the yield ramp on the 18-terabyte drives. Now on the flash side, as Dave said, I mean, we've got some price and mix headwind. And we also -- as I mentioned in my comments, we have costs up a bit on K1, which amounts to about 1 percentage point on the flash side. So it's just we have multiple challenges this quarter. But I think long term, we're going to be really well positioned once we get up these product ramps.

不，我認為這些是關鍵。我的意思是在硬盤上，顯然，容量要低一些。因此，隨著我們在 18 TB 驅動器上提高產量，我們將在較小的數量上攤銷固定成本。現在在閃存方面，正如戴夫所說，我的意思是，我們有一些價格和混合逆風。而且我們還 - 正如我在評論中提到的那樣，我們在 K1 上的成本有所上升，在閃存方面相當於大約 1 個百分點。因此，這只是本季度我們面臨的多重挑戰。但我認為從長遠來看，一旦我們提升這些產品坡道，我們將處於非常有利的位置。

Our next question will come from Aaron Rakers with Wells Fargo.

我們的下一個問題將來自富國銀行的 Aaron Rakers。

Just kind of building off that last question a little bit. I mean when you look at the hard disc drive gross margin at 27.2% and you adjust, looks like -- adjusted ex-COVID, looks like it's close to about 32%. I think it would be helpful just to kind of frame what the expectation is for COVID impact in this quarter. Is it -- probably not as high, but are we still carrying 3 percentage points plus of kind of headwind on gross margin? Just kind of any framework there. And on top of that, what are you seeing in pricing dynamics in nearline right now in the market?

只是稍微建立了最後一個問題。我的意思是，當您查看 27.2% 的硬盤驅動器毛利率並進行調整時，看起來 - 調整後的前 COVID 看起來接近 32% 左右。我認為這將有助於確定本季度對 COVID 影響的預期。是不是 - 可能沒有那麼高，但我們是否仍然承受 3 個百分點的毛利率加上某種逆風？只是那裡的任何框架。最重要的是，您目前在市場上的近線定價動態中看到了什麼？

So I'll take the second one. Bob can talk a little bit more about the first. The -- all the businesses transacting at 14T, it's a very competitive point in the market. There's no doubt about that. We're at the -- we're kind of at the tail end of one generation, moving to the next one, and that's why getting up the AT&T ramp is so -- 18, 16 ramp is so important for us. And that will position us well and be able to drive accretive margins to the portfolio on that point. But we expect that as we get 18 out there and the conversations with customers, it's a different TCO proposition for our customers. And that leads to more value for both of us. So we're heading to a better spot. I don't know. Bob, do you want to characterize COVID a little bit in this quarter? It's kind of -- it's a little tough because it's so dynamic.

所以我會選擇第二個。 Bob 可以多談談第一個。 - 所有在 14T 交易的業務，這是市場上非常有競爭力的點。毫無疑問。我們正處於 - 我們處於一代人的尾聲，正在進入下一代，這就是為什麼爬上 AT&T 坡道是如此 - 18、16 坡道對我們來說如此重要。這將使我們處於有利地位，並能夠在那時為投資組合增加利潤率。但我們預計，隨著我們推出 18 台產品並與客戶進行對話，這對我們的客戶來說是一個不同的 TCO 主張。這為我們雙方帶來了更多價值。所以我們要去一個更好的地方。我不知道。 Bob，你想在本季度稍微描述一下 COVID 的特點嗎？這有點——有點難，因為它是如此動態。

Yes. Yes. It's not going to be as significant as last quarter. And last quarter, we did offset the COVID cost a bit by pricing. But it obviously did not fully offset it. That's a big number. As we look at Q1, we don't think we're going to have the kind of absorption variances that we had last quarter. You may recall in the earnings call in April, I said that we had some challenges on volumes in April. So we already knew we had that headwind last quarter. We don't have that issue this quarter. So I would say the costs will be down, but I don't want to be too specific. We think we've got it covered in the guidance range that we articulated.

是的。是的。它不會像上個季度那麼重要。上個季度，我們確實通過定價稍微抵消了 COVID 成本。但這顯然並沒有完全抵消它。這是一個很大的數字。當我們查看第一季度時，我們認為我們不會像上個季度那樣出現吸收差異。你可能還記得在 4 月份的財報電話會議上，我說過我們在 4 月份的交易量上遇到了一些挑戰。所以我們已經知道上個季度我們遇到了逆風。我們本季度沒有這個問題。所以我會說成本會下降，但我不想太具體。我們認為我們已經將它包含在我們闡明的指導範圍內。

Okay. And then as a follow-up, I know there's a lot of discussion around cloud digestion, kind of mixed data points out there. Relative to the 30% implied nearline capacity ship growth this last quarter, what is your current assessment of the demand from a capacity ship standpoint nearline through the back half of this calendar year? Any kind of views on that front?

好的。然後作為後續行動，我知道有很多關於雲消化的討論，那裡有一些混合數據。相對於上一季度 30% 的隱含近線運力增長，您目前對本日曆年下半年近線運力需求的評估是什麼？在這方面有什麼看法嗎？

Yes. We feel like we're definitely going into a digestion phase. If we look at -- we're coming off of 3 really strong quarters of exabyte shipment, and the demand signals we're getting are going to be -- are a little bit down for the next quarter or 2. We think that -- I mean, the long-term trend is obviously still good. We're using the cloud more every day. But there's been a lot of product shipped in there in the last couple of quarters. And what we're seeing from them is, they're all not the same, right? We have all of them. So they're all at different points. But when you add it all up, you see next quarter, there's a negative bias on demand there from what we see looking backwards.

是的。我們覺得我們肯定會進入消化階段。如果我們看一下——我們正在擺脫 3 個非常強勁的 EB 季度出貨量，而我們收到的需求信號將會在下一個或 2 個季度略有下降。我們認為—— - 我的意思是，長期趨勢顯然還是不錯的。我們每天都在更多地使用雲。但是在過去的幾個季度裡，那裡已經運送了很多產品。我們從他們身上看到的是，他們都不一樣，對吧？我們都有。所以他們都在不同的點上。但是當你把它加起來時，你會看到下個季度，從我們向後看的情況來看，那裡的需求存在負面偏差。

So down sequential? Sorry.

那麼順次下降？對不起。

Yes.

是的。

Our next question will come from Karl Ackerman with Cowen.

我們的下一個問題將來自 Karl Ackerman 和 Cowen。

I wanted to follow up to Aaron's last question just on exabyte growth. You obviously -- you actually had a pretty strong quarter for exabyte growth within data center this quarter. But it does sound like the outlook is down sequentially, as you just indicated. I was hoping if you could juxtapose what you're seeing across both on-prem and private cloud environments versus public cloud as it relates to, I guess, both your hard drive portfolio but also your enterprise SSD portfolio. That's my first question.

我想跟進 Aaron 關於艾字節增長的最後一個問題。您顯然 - 本季度數據中心內的艾字節增長實際上有一個非常強勁的季度。但正如你剛才所說，聽起來前景確實是按順序下降的。我希望您能否將您在本地和私有云環境中看到的內容與公共雲並列，因為我猜這與您的硬盤產品組合以及您的企業 SSD 產品組合有關。這是我的第一個問題。

And for my follow-up, I was hoping you could -- you've obviously been a little bit smaller player in the enterprise SSD market of late, which has enabled some of the significant share gains. And quite frankly, you've completely turned around your technology portfolio within that enterprise SSD market. Is your expectation going forward for September that you should outperform end market demand given some of the share gains you've seen lately?

對於我的後續行動，我希望你能——你顯然是最近在企業 SSD 市場上的一個小玩家，這使得一些顯著的份額增長成為可能。坦率地說，您已經完全扭轉了該企業 SSD 市場中的技術組合。鑑於您最近看到的一些股票收益，您是否期望 9 月的表現應該超過終端市場需求？

So on the enterprise SSD, you're right. We've done a lot of work to launch a new product in enterprise SSD. We've got a couple of new products. The first one is out, and it's targeted to the cloud providers. The product targeted to the OEMs is yet to ship. So that will happen in the next couple of quarters. So we really are in a big product transition there. So it's hard for me to draw a conclusion to your question about on-prem versus the cloud given enterprise SSD because we're mainly focused on the cloud side right now, working our way through quals and all those kinds of things. Given that the product is new, given that we're going through a lot of qualifications, over a multi-quarter time frame, I expect us to get better and better. It's going to be a little lumpy as we move through that. So if I look at the number of quals going on in the organization, it's across all technologies. We have twice as many quals going on as we had a year ago this time. So that gives you an idea of where -- how the portfolio is refreshing, and we're driving that into the market.

所以在企業級 SSD 上，你是對的。我們做了很多工作來推出企業級 SSD 的新產品。我們有幾個新產品。第一個已經發布，它針對的是雲提供商。針對 OEM 的產品尚未發貨。所以這將在接下來的幾個季度發生。因此，我們確實在那裡進行了重大的產品轉型。因此，我很難對您關於企業 SSD 的本地與雲的問題下結論，因為我們現在主要關注云方面，通過質量和所有這些事情。鑑於產品是新的，鑑於我們正在經歷很多資格，在一個多季度的時間框架內，我希望我們會變得越來越好。當我們通過它時，它會有點笨拙。因此，如果我查看組織中正在進行的資格數量，它涉及所有技術。我們的資格是一年前的兩倍。因此，這讓您了解產品組合在哪裡令人耳目一新，我們正在將其推向市場。

On the hard drive side, I guess I can talk about the OEMs in the private data center more of just as an overall market. I mean, well, let me save that response for a different time because that's more PC-related. But I don't know if I have a tremendous amount of insight. Bob, I don't know if you do on the hard drive side versus on-prem versus in the cloud, if we could draw any strong conclusions for that.

在硬盤方面，我想我可以將私有數據中心的 OEM 更多地視為一個整體市場。我的意思是，好吧，讓我把這個回复留到不同的時間，因為這更與 PC 相關。但我不知道我是否有巨大的洞察力。 Bob，我不知道你是在硬盤端還是在本地還是在雲中，我們是否可以為此得出任何強有力的結論。

No. I think we're seeing softness in both areas as we move forward into Q1.

不。我認為隨著我們進入第一季度，我們在這兩個領域都看到了疲軟。

Our next question will come from Mehdi Hosseini with SIG.

我們的下一個問題將來自 SIG 的 Mehdi Hosseini。

The first one, on the hard disk drive. One of your competitors had referenced weaker demand trends, especially for client noncompute out of China. And when I just do a back of envelope, if that is what's happening and impacting your client noncompute, it seems to me that your exabyte shipment for that particular segment may have been down by more than 20% on a Q-o-Q basis. And I was wondering if you could elaborate on it. And I have a follow-up.

第一個，在硬盤驅動器上。您的一位競爭對手提到了需求疲軟的趨勢，特別是對於中國以外的客戶非計算。當我只是做一個信封背面時，如果這是正在發生的事情並影響您的客戶非計算，那麼在我看來，您對該特定細分市場的 EB 出貨量可能環比下降了 20% 以上。我想知道你是否可以詳細說明一下。我有一個後續行動。

Yes. I'll elaborate on the general market. I don't know if I can follow the back of your envelope that fast. But look, I think the channel was -- let me talk about the channel in general and smart video as a part of that. That was a real slog this past quarter. I mean the team worked really hard on it. We thought we saw TAM shrinkage there, significant TAM shrinkage of $100 million or so a year throughout the quarter. So it was -- we look at -- to us, that's a good indication of overall demand that's out there, and it was tough and related to that, and we see that going forward kind of a negative bias on that market. So I don't know, Bob, if you have any additional comments on the smart video, in particular.

是的。我將詳細說明一般市場。我不知道我能不能那麼快地跟踪你的信封背面。但是看，我認為頻道是——讓我談談一般的頻道和智能視頻作為其中的一部分。在上個季度，這是一個真正的艱難。我的意思是團隊在這方面非常努力。我們認為我們在那裡看到了 TAM 的收縮，整個季度 TAM 每年顯著收縮 1 億美元左右。所以——我們認為——對我們來說，這是對總體需求的一個很好的跡象，這是一個艱難的過程，並且與此相關，我們看到未來對該市場的負面偏見。所以我不知道，Bob，您是否對智能視頻有任何其他意見，特別是。

No. I agree in the short term. If we look over the longer-time horizon, that is going to be another area of growth in the hard drive business. So we really see the capacity in enterprise business and the smart video business growing as we look over multiple years.

不，我在短期內同意。如果我們從長遠來看，這將是硬盤業務的另一個增長領域。因此，我們確實看到了企業業務和智能視頻業務的能力在我們多年來的增長中。

Yes. I mean I think this overall theme you're hearing from us, which is as we look at -- I mean, as we look forward into the next quarter, we see some challenges given COVID, given the state of the economy, given all the demand we've seen in the first half and the inventory rationalizations and digestions that are going on. But in all of those markets, we see very good long-term trends. And so it's a question of how fast that comes back. But all of the -- I think the pandemic has shown us the amount that all of us are relying on technology, and I think our portfolio is as well positioned for that world as it has been in some time.

是的。我的意思是，我認為您從我們那裡聽到的這個總體主題，正如我們所看到的那樣——我的意思是，在我們展望下個季度時，鑑於 COVID、考慮到經濟狀況、考慮到所有我們在上半年看到的需求以及正在進行的庫存合理化和消化。但在所有這些市場中，我們都看到了非常好的長期趨勢。所以這是一個多快回來的問題。但是所有這些——我認為大流行向我們展示了我們所有人對技術的依賴程度，而且我認為我們的產品組合在一段時間內已經為這個世界做好了充分的準備。

Great. And just my follow-up question has to do with your -- the flash. You highlighted the fact that your revenues were up 70% or so. But I heard that commentary suggests there is an unfavorable mix shift into the September quarter. Perhaps you could help us better understand the dynamic if you were to elaborate on the mix of your NAND, how SSD and smartphone application are trending? And it seems to me that maybe the game console is happening later in the year. And if you could elaborate on it, it will be great.

偉大的。我的後續問題與您的閃光燈有關。您強調了您的收入增長了 70% 左右的事實。但我聽說評論表明，9 月季度出現了不利的混合變化。如果您要詳細說明 NAND 的組合、SSD 和智能手機應用程序的趨勢，也許您可以幫助我們更好地了解動態？在我看來，遊戲機可能會在今年晚些時候推出。如果你能詳細說明它，那就太好了。

Yes. So I think there are a bunch of pieces in there, Mehdi. So game console is definitely a growth area, and we're very fortunate to be participating in that. And as you know, we haven't been in the hard drive side of that business for quite a while. So it's all upside from our perspective. And then I would say, overall, there may be slight mix changes as we go quarter-to-quarter. We are seeing some pressure in terms of price, and that's factored into our guidance as well.

是的。所以我認為那裡有一堆碎片，Mehdi。所以遊戲機絕對是一個增長領域，我們很幸運能夠參與其中。如您所知，我們已經有一段時間沒有涉足該業務的硬盤方面了。所以從我們的角度來看，這一切都是好的。然後我會說，總體而言，隨著我們每季度的變化，可能會有輕微的混合變化。我們在價格方面看到了一些壓力，這也納入了我們的指導。

Yes, Mehdi. This is Peter. Also don't forget, we do have a little bit of a step-up in the K1 cost. But as you go Q-to-Q, that will be another pressure on the flash gross margins.

是的，邁赫迪。這是彼得。也不要忘記，我們確實在 K1 成本上有所提高。但當你從 Q 到 Q 時，這將是閃存毛利率的另一個壓力。

Okay. But in terms of the end market and mix as it relates to flash, there is -- you shouldn't assume a significant change?

好的。但就與閃存相關的終端市場和組合而言，您不應該假設會有重大變化嗎？

I think the biggest change is the one I mentioned on game consoles becoming more significant. But otherwise, it will be up and down here and there, but I don't think it'll be that material.

我認為最大的變化是我提到的遊戲機變得更加重要。但除此之外，它會在這里和那裡上下波動，但我認為不會是那種材料。

Our next question will come from C.J. Muse with Evercore.

我們的下一個問題將來自 C.J. Muse 和 Evercore。

I guess first question, as it relates to your overall revenue guide for September of down 11% sequentially, should we be thinking that each business is down similar to that rate? Is one doing better than the other? Could you shed a little light on that, please?

我想第一個問題，因為它與您 9 月份的整體收入指南（環比下降 11%）有關，我們是否應該認為每項業務的下降率都與該速度相似？一個比另一個做得更好嗎？請你稍微解釋一下，好嗎？

Sure. I mean I think we're seeing retail -- last quarter, we started off in the retail business, which is roughly 20% of the business is really challenged, and it got better as the quarter went on and June was good. It wasn't quite all the way back to normal, but it was strong. And we've seen that continue through July. And we're expecting that business to be positive in the quarter going forward. And if you look at all the other businesses, the cloud, again, we talked about that, we see a digestion phase there. We see the OEMs kind of really watching inventory and managing that tighter. And then I talked about the channel. So as we said, long term, we see good things where the portfolio is going. But in the near term, that's how we see the 4 major businesses.

當然。我的意思是我認為我們正在看到零售——上個季度，我們從零售業務開始，大約 20% 的業務確實受到挑戰，隨著季度的進行和 6 月份的好轉，情況變得更好。它並沒有完全恢復正常，但它很強大。我們已經看到這種情況一直持續到 7 月。我們預計該業務在接下來的季度將是積極的。如果你再看看所有其他業務，雲，我們再次談到了這一點，我們看到了一個消化階段。我們看到原始設備製造商確實在關注庫存並進行更嚴格的管理。然後我談到了頻道。因此，正如我們所說，從長遠來看，我們看到了投資組合的發展方向。但在短期內，這就是我們對四大業務的看法。

And so if I just read between the lines, given the commentary on retail, that would suggest NAND might be a little bit better than HDD?

因此，如果我只是在字裡行間閱讀，鑑於對零售的評論，這表明 NAND 可能比 HDD 好一點？

I wouldn't draw specific -- yes.

我不會畫具體的——是的。

I don't know if I'd go into that level of detail.

我不知道我是否會進入那種詳細程度。

Okay. And I guess a question on the flash side and to follow up on Mehdi's question. For the June quarter, I guess I was a little bit surprised by the lower ASP uplift but higher bit growth. I guess can you comment on what drove that? And I guess just to follow up, should we be assuming similar mix as the June quarter, coupled with an uplift in gaming, to -- as we build out our ASP kind of assumptions?

好的。我猜想在 Flash 方面有一個問題，並跟進 Mehdi 的問題。對於六月季度，我想我對較低的 ASP 提升但較高的位增長感到有些驚訝。我想你能評論一下是什麼推動了這一點嗎？我想只是為了跟進，我們是否應該假設與 6 月季度類似的組合，再加上游戲的提升，以 - 當我們建立我們的 ASP 類型的假設時？

Yes. So I'll make a few comments. I'm sure Bob will make a few comments. I mean part of the ASP, looking back, was retail where ASPs were -- for flash were more challenged. So that's a big piece of that number. I think going forward, you shouldn't expect a tremendously different mix. Minus what you said, gaming, was it -- and it was good to see gaming start to ramp up. We expect that to continue to ramp through the second half of the year and take a low double-digit percent of our supply. So that's a good story.

是的。所以我會發表一些評論。我相信 Bob 會發表一些評論。我的意思是 ASP 的一部分，回顧過去，是 ASP 所在的零售業——因為閃存面臨更大的挑戰。所以這是這個數字的很大一部分。我認為展望未來，你不應該期待一個截然不同的組合。減去你所說的，遊戲，是嗎 - 很高興看到遊戲開始增加。我們預計這將在今年下半年繼續增長，並占我們供應量的兩位數百分比。所以這是一個好故事。

Yes. And I don't have a lot to add. I mean I think in the transactional businesses, we've definitely seen more pricing pressure than we've seen from the OEMs. Although overall, we think prices will be down this quarter.

是的。而且我沒有太多要補充的。我的意思是，我認為在交易業務中，我們確實看到了比原始設備製造商更大的定價壓力。儘管總體而言，我們認為本季度價格將下降。

Our next question will come from Joe Moore with Morgan Stanley.

我們的下一個問題將來自摩根士丹利的喬摩爾。

I wonder if you could talk about in the NAND business, just how comfortable you are. I mean last year, you -- when things got kind of weak, you guys took underutilization actions to kind of clean up inventory. You're not doing that now. Does that suggest supply/demand is in a healthier place? Or just anything you can kind of tell us about the state of your inventory, customer inventory and your plan there.

我想知道您是否可以談論 NAND 業務，您的自在程度如何。我的意思是去年，當事情變得有點疲軟時，你們採取了未充分利用的行動來清理庫存。你現在不這樣做了。這是否表明供需處於更健康的狀態？或者您可以告訴我們有關您的庫存狀態、客戶庫存和您的計劃的任何信息。

Yes. I'll make a few comments, and Bob can make a few comments. Yes, I think we feel good about the amount -- the industry keeping supply/demand in balance. I mean, clearly, we've got a -- in a recession, we have a drop in demand. So we're seeing some pricing implications of that. But we feel like the -- kind of where supply/demand is, is fairly balanced going forward. We're certainly watching our CapEx investments very closely and managing more tightly with our partner. But Bob, do you want to say anything about inventory? Or...

是的。我會發表一些意見，Bob 可以發表一些意見。是的，我認為我們對數量感覺良好——該行業保持供需平衡。我的意思是，很明顯，我們有一個 - 在經濟衰退中，我們的需求下降了。因此，我們看到了一些定價影響。但我們覺得，供需關係在未來相當平衡。我們當然會非常密切地關注我們的資本支出投資，並與我們的合作夥伴進行更緊密的管理。但是鮑勃，你想談談庫存嗎？或者...

Yes. I mean I joined the company right in the middle of the last trough. And I can tell you the supply and demand imbalance is nothing like it was then today. So I think everybody is behaving pretty rationally. We still see the industry growing bits and then -- bits, both supply and demand, in the neighborhood of 25% to 30%, and that's our intention as well.

是的。我的意思是我在最後一個低谷的中間加入了這家公司。我可以告訴你，供需失衡與今天完全不同。所以我認為每個人的行為都很理性。我們仍然看到該行業不斷增長比特，然後 - 比特，無論是供應還是需求，都在 25% 到 30% 左右，這也是我們的意圖。

Okay. And then for my follow-up, it sounds like you're pretty comfortable on the adjusted EBITDA covenant calculations for September. But obviously, memory can be uncertain beyond that. Can you talk about your comfort level overall on the covenants? And is there anything -- any actions you could take if things got worse to sort of make sure you don't have any issues there?

好的。然後對於我的後續行動，聽起來您對 9 月份調整後的 EBITDA 契約計算感到非常滿意。但顯然，除此之外，記憶可能是不確定的。你能談談你對契約的總體舒適度嗎？有什麼 - 如果情況變得更糟，你可以採取任何行動來確保你沒有任何問題嗎？

So I'm very comfortable. In fact, if you go back like to the trough I was just talking about, we never really got that close to breaching the covenant on the adjusted basis. So I really don't think there's much of a risk there.

所以我很舒服。事實上，如果你像我剛才所說的那樣回到低谷，我們從來沒有真正接近在調整後的基礎上違反盟約。所以我真的認為那裡沒有太大的風險。

Joe, also just to put a little bit more transparency into the credit agreement metrics, please make sure you take a look at the slide deck that's on our website. We've got a lot more detail on that metric in there.

喬，也只是為了提高信用協議指標的透明度，請務必查看我們網站上的幻燈片。我們在那裡有更多關於該指標的詳細信息。

Our next question will come from Ananda Baruah with Loop Capital.

我們的下一個問題將來自 Loop Capital 的 Ananda Baruah。

I guess the first one for me is with regards to the gross margin guidance. Could you give us a sense of which part of the business you expect to contract more of the hard drives versus the flash? It sounds like on flash, there's slight mix, and on retail, Bob, as per your remarks, slight pricing pressure. They're not from OEM contract yet. And then it sounds like on the hard drive business, it's probably more mix related. Is there anything in addition to that? And then could you just give us a sense of magnitude for each of these businesses? And then I have a quick follow-up.

我想第一個對我來說是關於毛利率的指導。您能否告訴我們您希望在業務的哪個部分承包更多的硬盤驅動器而不是閃存？聽起來，在閃存上，有輕微的混合，而在零售上，鮑勃，根據你的說法，價格壓力很小。他們還不是來自 OEM 合同。然後聽起來像是在硬盤業務上，它可能與混合相關。除此之外還有什麼嗎？然後，您能否讓我們了解這些業務的重要性？然後我有一個快速跟進。

Yes. I mean I'll touch on it again. I don't want to get into too many specifics. As you know, we only guide gross margin for the company overall. But we're definitely seeing pressures on both sides, both on the hard drive and on the flash. Like we said before, we've got significant product transition going on, on the hard drive side. We've got a yield curve that we're working our way up. And we've got the COVID-19 pressures that they won't be as bad this coming quarter, the quarter we're in now, as they were last quarter. But we definitely have pressures on the hard drive side. And I would say on the flash side, we're seeing pressures primarily on price and a little bit of mix and then the K1 costs that we talked about as well.

是的。我的意思是我會再次觸及它。我不想涉及太多細節。如您所知，我們僅指導公司整體的毛利率。但我們肯定看到了雙方的壓力，無論是在硬盤驅動器上還是在閃存上。正如我們之前所說，我們在硬盤方面正在進行重大的產品轉型。我們有一條收益率曲線，我們正在努力向上。我們面臨著 COVID-19 的壓力，他們在下個季度（我們現在所處的季度）不會像上個季度那樣糟糕。但我們在硬盤方面肯定有壓力。我想說的是，在閃存方面，我們看到的壓力主要是價格和一些混合，然後是我們談到的 K1 成本。

Right, the K1 costs. And guys, any -- you mentioned about going through a period of digestion in cloud that dovetails with your top competitors' remarks and also with the remarks of the hyperscalers. Any context you can provide around just sort of do you think that means this cycle is through? Or does digestion to you guys really just mean like a period of digestion and then you think, "We can get back to some semblance of growth again in the near future?"

對，K1 成本。伙計們，任何 - 你提到經歷一段雲消化時期，這與你的頂級競爭對手的言論以及超大規模企業的言論相吻合。您可以提供的任何上下文只是您認為這意味著這個週期已經結束了嗎？或者消化對你們來說真的只是意味著一段時間的消化，然後你會想，“我們可以在不久的將來再次恢復到某種增長？”

Yes. I mean, look, I mean, we see -- we -- it's a long-term growth market. I mean we see 30%, 35% CAGR exabyte growth in that market for years to come. We're coming off of a couple of quarters of significantly above that. It's not surprising we would go through a little bit of time where all of that capacity gets deployed. But I think just look at the world around us, I mean, we're all using the cloud more every day. I think the last 5 months have accelerated the amount of transformation that was going to happen in using of cloud technology significantly. So I don't -- I'm not exactly how we would both define a cycle. But I see a really good long-term trend in this, and I see us well positioned as well. That's why this coming quarter is important for us to get the 18, 16 platform ramped, get the 1 million units produced, get those shipped to put ourselves in a good position for that continued growth.

是的。我的意思是，看，我的意思是，我們看到 - 我們 - 這是一個長期增長的市場。我的意思是，我們看到該市場未來幾年的複合年增長率將達到 30%、35% 艾字節。我們正在擺脫顯著高於該水平的幾個季度。毫不奇怪，我們會花一點時間來部署所有這些容量。但我想看看我們周圍的世界，我的意思是，我們每天都在更多地使用雲。我認為過去 5 個月顯著加速了在使用雲技術方面將發生的轉變。所以我不——我不完全是我們定義循環的方式。但我看到了一個非常好的長期趨勢，我認為我們也處於有利地位。這就是為什麼下一個季度對我們來說很重要的原因是讓 18 和 16 平台加速，生產 100 萬台，讓那些出貨讓我們處於持續增長的有利位置。

And just the one thing I would add. I just think there's been a lot of supply chain disruption this year, both in terms of our own production, our customers trying to make sure they get supply. Now our customers are working off inventory levels. So I just think between the pandemic and the recession and concerns on supply, it's been a very challenging year.

我要補充的只是一件事。我只是認為今年有很多供應鏈中斷，無論是在我們自己的生產方面，還是在我們的客戶試圖確保他們獲得供應方面。現在我們的客戶正在處理庫存水平。因此，我只是認為在大流行和經濟衰退以及對供應的擔憂之間，這是非常具有挑戰性的一年。

Our next question will come from Mitch Steves with RBC Capital Markets.

我們的下一個問題將來自 RBC Capital Markets 的 Mitch Steves。

I just wanted to follow up a bit on the gross margin side. So when you talk about COVID-19 issue kind of being a little bit better than you guys saw or better than last quarter, how do we think about the bigger drivers of your gross margins going back to 30%? Is there really going to be a NAND improvement on pricing? Or is it going to be a lot of supply chain issues? I'm trying to get an understanding of what's really moving the margins so dramatically on a quarterly basis.

我只是想在毛利率方面跟進一下。因此，當您談到 COVID-19 問題比你們看到的或比上一季度好一點時，我們如何看待使您的毛利率回到 30% 的更大驅動因素？ NAND的定價真的會有所改善嗎？還是會出現很多供應鏈問題？我試圖了解是什麼真正使每個季度的利潤如此顯著。

Yes. I'll maybe paint a big picture of that, and Bob wants to go into a little bit of detail. So I mean, it's both important on both sides. But one is, on flash, first of all, continue to BiCS5. BiCS4 is a great node for us, giving us cost reductions and performance we need. The BiCS5 transition, I think the team made really, really sound choices on going to that technology. As we talked about, the yields have been impressive. We're kind of ahead of internal plans on that node. So continuing to drive that technology road map that gives us cost advantages is the first part of it. And then secondly, it's optimizing the portfolio on top of it for the markets we play in for optimizing gross margin. That's -- as you see us moving more to enterprise SSD, things that we think are going to drive higher margins. So that's a big part of it on flash. And of course, then you got pricing on top of that, which is a market concern.

是的。我可能會畫出一張大圖，鮑勃想詳細介紹一下。所以我的意思是，這對雙方都很重要。但是一個是，在flash上，首先，繼續BiCS5。 BiCS4 對我們來說是一個很棒的節點，它為我們提供了所需的成本降低和性能。 BiCS5 過渡，我認為團隊在採用該技術時做出了非常非常合理的選擇。正如我們所說，產量令人印象深刻。我們有點領先於該節點的內部計劃。因此，繼續推動為我們帶來成本優勢的技術路線圖是其中的第一部分。其次，它正在優化我們所參與的市場的投資組合，以優化毛利率。那是 - 當您看到我們更多地轉向企業 SSD 時，我們認為這些事情將推動更高的利潤率。所以這是閃存的很大一部分。當然，然後你會得到定價，這是市場關注的問題。

On the hard drive side, again, it's -- gross margin to me is led by innovation. So we ramp the 18-, 16-terabyte platform, that's a better TCO for our customers. That's a better value proposition for them. That's higher gross margins for us. So that's why we're so focused on getting that -- getting up the production ramp on that and why we feel good about that platform. So those are the main drivers from my perspective. Bob?

在硬盤方面，對我來說，毛利率是由創新引領的。因此，我們增加了 18、16 TB 的平台，這對我們的客戶來說是一個更好的 TCO。這對他們來說是一個更好的價值主張。這對我們來說是更高的毛利率。所以這就是我們如此專注於實現這一目標的原因——在這方面加快生產速度，以及為什麼我們對這個平台感覺良好。因此，從我的角度來看，這些是主要驅動力。鮑勃？

Yes. I don't think I have much to add. I mean I think it's clear, we've got room to improve in both the hard drive area and in the flash area. And we've got the products to make it happen.

是的。我想我沒有太多要補充的。我的意思是我認為很明顯，我們在硬盤驅動器領域和閃存領域都有改進的空間。我們有產品來實現它。

Got it. And then just one other small one, just on the smartphone cycle. I mean it's been very clear that some of the bigger products got pushed out, right, so their time -- that they're going to ramp up more in Q4 into the Q3. Can you maybe give us an understanding of how that impacts you? And how you guys think about the push-out as it relates to the flash business?

知道了。然後只是另一個小的，就在智能手機週期中。我的意思是很明顯，一些更大的產品被推出了，對，所以他們的時間——他們將在第四季度到第三季度增加更多。您能否讓我們了解這對您有何影響？你們如何看待與閃存業務相關的推出？

I guess I can start.

我想我可以開始了。

I'm sorry, I didn't understand the question. What was...

對不起，我沒看懂這個問題。什麼是...

It was on mobile.

它在手機上。

Okay. I'm sorry.

好的。對不起。

I'll start. So as you know, we've been underweight in mobile for quite a while. We continue to be underweight in terms of mobile. Now if that business is lower than what's anticipated, our competitors need to find homes for those bits. So we're not completely insulated from the challenges on the mobile side because they do need to move into other markets in order to move the bits. But I think in terms of our strategy of focusing on the other areas, I think it's worked out pretty well.

我會開始的。如您所知，我們在移動領域一直處於低配狀態。在移動方面，我們繼續減持。現在，如果該業務低於預期，我們的競爭對手需要為這些比特尋找歸宿。因此，我們並沒有完全擺脫移動端的挑戰，因為它們確實需要進入其他市場才能移動比特。但我認為就我們專注於其他領域的戰略而言，我認為效果很好。

(Operator Instructions) Our next question will come from Sidney Ho with Deutsche Bank.

（操作員說明）我們的下一個問題將來自德意志銀行的 Sidney Ho。

On the NAND side, SSD side, I know you probably don't want to comment on how much do you think NAND price is going to come down. But hypothetically, if prices start to decline more rapidly than your cost improvement over the next few quarters, say, 10%, 15%, 20% a quarter, how would you respond to that kind of pricing environment in terms of inventory utilization, CapEx and so on and so forth?

在 NAND 方面，SSD 方面，我知道你可能不想評論你認為 NAND 價格會下降多少。但假設性地，如果價格在接下來的幾個季度中開始下降的速度超過您的成本改善速度，例如每季度 10%、15%、20%，那麼您將如何在庫存利用率、資本支出方面應對這種定價環境等等等等？

Yes. I guess I can start. I mean -- and first of all, our view on cost reduction is still around 15% a year. So we don't see that changing. We think that's what you're going to see in the 3D era because it's so much more capital-intensive. And what we think you're going to see is a competitive marketplace where people are behaving rationally. I mean that's -- a lot of the reports that we've seen over the last couple of weeks, it seems like everybody is trying to make sure we don't end up in an oversupply situation. And we're going to be cautious, as I said, in terms of how we invest in our capital. Some of the CapEx we're funding right now is related to equipment we put in place last fiscal year. So we'll keep a very close eye in terms of what's going on in terms of the balance of supply and demand.

是的。我想我可以開始了。我的意思是——首先，我們對降低成本的看法仍然是每年大約 15%。所以我們看不到這種變化。我們認為這就是您將在 3D 時代看到的，因為它需要更多的資本。我們認為你會看到的是一個競爭激烈的市場，人們在其中表現得很理性。我的意思是——我們在過去幾週看到的很多報告，似乎每個人都在努力確保我們不會最終陷入供過於求的局面。正如我所說，在我們如何投資我們的資本方面，我們將保持謹慎。我們現在正在資助的一些資本支出與我們上一財年安裝的設備有關。因此，我們將密切關注供需平衡方面的情況。

Yes. I mean I don't like to deal too much in hypotheticals. But we've got a lot of conviction in that market. If you just look at gaming really coming on in the second half of this year, as you said, the 5G cycle may move around a little bit, but it's still out there. So there's a lot of demand drivers, and we believe in that 30% CAGR in that market on the demand side.

是的。我的意思是我不喜歡過多地處理假設。但我們對這個市場有很大的信心。如果你只看今年下半年真正出現的遊戲，正如你所說，5G 週期可能會稍微移動一點，但它仍然存在。所以有很多需求驅動因素，我們相信需求方面的市場複合年增長率為 30%。

Our next question will come from Shannon Cross with Cross Research.

我們的下一個問題將來自 Cross Research 的 Shannon Cross。

I was just wondering if you could take a step back when you were coming up with your guidance sort of from a higher level. How much of it is coming from a lack of visibility versus maybe specific conversations with your customers? And then if you're looking at where there might be an opportunity for upside, where would that be?

我只是想知道，當你從更高的層面提出指導意見時，你是否可以退後一步。其中有多少是由於缺乏可見性而不是與客戶的特定對話？然後，如果您正在尋找可能有上漲機會的地方，那會在哪裡？

Yes. I would say, in general, we look at a wide range of data points. I mean some of the businesses are like a retail business, what's the trend that's going on there and what do we see and what may be disruptions. For example, in the period ahead, we typically see a back-to-school cycle. It's unclear what that's going to look like. So that puts some variability in the forecast. But we talked to our -- our teams are very, very close to our customers. So we're talking to them on a near daily basis and getting a very -- a sense of what -- how they're thinking about their end markets and what the signals they're giving us for demand. And we're factoring all of that in to kind of what they're telling us and what we see as the bias. And then we're wrapping in new product quals. I mean we talked about it in our prepared remarks.

是的。我想說，一般來說，我們會查看廣泛的數據點。我的意思是有些業務就像零售業務，那裡正在發生什麼趨勢，我們看到了什麼，可能會出現什麼中斷。例如，在未來一段時間內，我們通常會看到一個返校週期。目前還不清楚那會是什麼樣子。因此，這會給預測帶來一些可變性。但是我們與我們的團隊進行了交談 - 我們的團隊非常非常接近我們的客戶。因此，我們幾乎每天都在與他們交談，並且非常了解他們對終端市場的看法以及他們向我們提供的需求信號。我們將所有這些因素都考慮到他們告訴我們的內容以及我們認為的偏見中。然後我們正在包裝新產品質量。我的意思是我們在準備好的評論中談到了它。

We're going through a bunch of very substantial product transitions. Now we feel really good about that, but we got to get through it. There's risk in those. So we make a risk-adjusted view of which of those are going to hit, which of them are not, which ones may move around for various reasons. I think I said it earlier, we have twice as many quals going right now as we did last year, and the number is over 450. So there's a lot of activity across the portfolio. The big ones, there's probably 2, 3, 4 dozen really big ones. So we factor that in as well. And we understand when they're going to hit and put some judgment around that. We wrap it all up into the guide. So if some of those quals move around, they could be in a positive or negative, there's enough of them that hopefully that balances out. But we put together our best view of what we think is going to happen over the next quarter.

我們正在經歷一系列非常重要的產品轉型。現在我們對此感覺非常好，但我們必須克服它。這些都是有風險的。因此，我們對哪些會受到影響、哪些不會受到影響、哪些可能由於各種原因而四處走動進行風險調整後的看法。我想我之前說過，我們現在的資格是去年的兩倍，數量超過 450。所以整個投資組合都有很多活動。大的，可能有 2、3、4 打非常大的。因此，我們也將其考慮在內。我們了解他們什麼時候會打擊並對此做出判斷。我們將其全部包含在指南中。因此，如果其中一些資格四處走動，他們可能是積極的或消極的，有足夠多的人希望能夠平衡。但我們對我們認為下一季度會發生的事情做出了最好的看法。

Our Next question will come from Patrick Ho with Stifel.

我們的下一個問題將來自 Patrick Ho 和 Stifel。

Dave, maybe just following up on some of the NAND questions. You talked about the strong demand you're seeing for the BiCS5 product. Given some of the market dynamics that are going on right now, and you mentioned some price erosion and maybe a little bit of inventory that's been built and some digestion, how do you see that potentially affecting the ramp of the BiCS5 product? Does that push it out somewhat? Or are we going to see maybe a potentially steeper BiCS4 decline as BiCS5 ramps up?

戴夫，也許只是跟進一些 NAND 問題。您談到了對 BiCS5 產品的強勁需求。鑑於目前正在發生的一些市場動態，你提到了一些價格侵蝕，可能還有一些已經建立的庫存和一些消化，你如何看待這可能會影響 BiCS5 產品的增長？這是否有點推出？或者，隨著 BiCS5 的上升，我們是否會看到 BiCS4 的下降幅度可能更大？

Yes. I want to be careful. I don't think I talked about BiCS5 demand in the sense of BiCS. So I don't -- our customers just look for the NAND products, and it's up to us to build the right technology for that. And as we drive the road map forward, we can get more advantageous cost for us. And what we're saying on BiCS5 is the development of the technology is going well, and the yields are going well. We've got the product in the retail channel already, and we are working on all the engineering work to put it into the whole product portfolio. So we will look to accelerate that work as much as we can to get as many things on that node as possible. But there's a lot of work to do there, right? Before we -- BiCS4 is a great node for us. It's providing us the performance and cost advantages that we need. As I said, I think 60% of our bits this quarter were beyond BiCS4. You're going to see us -- BiCS4 will be our major node for several quarters to come as we work on the transition in the portfolio to BiCS5, which will then carry us for another several years.

是的。我要小心。我不認為我談論的是 BiCS 意義上的 BiCS5 需求。所以我不——我們的客戶只是在尋找 NAND 產品，而這取決於我們構建正確的技術。隨著我們推進路線圖，我們可以獲得更有利的成本。我們在 BiCS5 上所說的是技術的發展進展順利，產量進展順利。我們已經在零售渠道中獲得了該產品，並且我們正在開展所有工程工作，以將其納入整個產品組合。因此，我們將盡可能加快這項工作，以在該節點上獲得盡可能多的東西。但是那裡有很多工作要做，對吧？在我們之前——BiCS4 對我們來說是一個很棒的節點。它為我們提供了所需的性能和成本優勢。正如我所說，我認為本季度我們 60% 的比特超出了 BiCS4。你會看到我們——BiCS4 將成為我們未來幾個季度的主要節點，因為我們致力於將產品組合過渡到 BiCS5，然後我們將繼續使用幾年。

Our next question will come from Srini Pajjuri with SMBC Nikko.

我們的下一個問題將來自 SMBC Nikko 的 Srini Pajjuri。

I have a question about the cost on the NAND side. Bob, can you talk about as BiCS5 ramps, I think previously, you said your cost decline expectation is about mid-teens or so, annual. As BiCS5 ramps, do you still expect that? And then also on the K1 cost, you said $80 million this quarter is the peak. And if demand continues to remain weak, how should we think about that $80 million coming down over the next few quarters?

我對 NAND 方面的成本有疑問。 Bob，你能談談 BiCS5 的增長嗎，我之前認為，你說過你的成本下降預期大約是每年十幾歲左右。隨著 BiCS5 的升級，你還期待嗎？然後關於 K1 成本，你說本季度 8000 萬美元是峰值。如果需求繼續疲軟，我們應該如何看待接下來幾個季度將減少的 8000 萬美元？

Yes. So I guess a couple of questions in there. First of all, we still believe over a number of quarters, we're going to average 15% year-over-year cost declines, and we think that's pretty sustainable. We've been able to achieve that with BiCS4. We think we'll be able to achieve that with BiCS5, and we'll continue to work through the transition. As Dave was just saying, it's going to take several quarters to ramp up on BiCS5. It's not going to be overnight, we throw a switch and we're on BiCS5. And BiCS4 has worked out really well. BiCS4 will be an even bigger percentage of the total next quarter than it is this quarter. So we still have a ways to go on BiCS4.

是的。所以我猜裡面有幾個問題。首先，我們仍然相信在多個季度中，我們的成本將平均同比下降 15%，我們認為這是非常可持續的。我們已經能夠通過 BiCS4 實現這一目標。我們認為我們將能夠通過 BiCS5 實現這一目標，並且我們將繼續努力完成過渡。正如 Dave 剛才所說，BiCS5 的升級需要幾個季度的時間。這不會是一夜之間，我們扔了一個開關，我們就在 BiCS5 上。 BiCS4 的效果非常好。與本季度相比，下個季度 BiCS4 將佔總數的比例更大。所以我們仍然有辦法繼續使用 BiCS4。

And then in terms of the K1 costs, we do believe this is the peak. There's a lot of equipment getting installed. As you know, it's a long cycle time. So we've got to get products through the cycle. And then we'll be able to capitalize or inventory more of those costs and bring down the period expenses as we move forward. So I think we're getting to the point where our volumes are getting up there where the period expenses will start to go away.

然後就 K1 成本而言，我們確實認為這是峰值。有很多設備要安裝。如您所知，這是一個很長的周期。所以我們必須讓產品通過這個週期。然後我們將能夠資本化或盤點更多這些成本，並在我們前進的過程中降低期間費用。所以我認為我們已經到了我們的交易量正在上升的地步，期間費用將開始消失。

Our next question will come from Vijay Rakesh with Mizuho.

我們的下一個問題將來自瑞穗的 Vijay Rakesh。

Just 2 questions. I was wondering on the hard disc drive side, on the 18-terabyte, I know you mentioned it's a big product for you. Will you be shipping -- and you said more than 1 million units here. So do you expect that to ramp to a couple of million in December quarter? How does that ramp?

就2個問題。我想知道在硬盤驅動器方面，在 18 TB 上，我知道你提到它對你來說是一個大產品。你會發貨嗎？你說這裡有超過 100 萬台。那麼您是否預計在 12 月季度會達到數百萬？那是怎麼坡道的？

And also, on the NAND side, it looks like that $80 million cost for Q1 start-up in September is almost like 300 bps of a gross margin headwind. So is that a clear -- 350 bps of gross margin headwind looks like. So is that the majority of the gross margin headwind on NAND? Or is pricing a bigger factor in there?

此外，在 NAND 方面，9 月份第一季度的 8000 萬美元啟動成本看起來幾乎是毛利率逆風的 300 個基點。所以這是一個明顯的——毛利率逆風350個基點。那麼這是 NAND 毛利率的主要阻力嗎？還是定價是其中一個更大的因素？

Do you want me to start?

你想讓我開始嗎？

Yes. You start with K1.

是的。您從 K1 開始。

Okay. Yes. Let me start on K1. So we've been averaging around $60 million a quarter the last 4 quarters in terms of period expenses for the K1 fab. And then as we said, in the September quarter, we're going to go up to $80 million. So incrementally, it's about $20 million. On the flash revenue, that's somewhere in the neighborhood of an incremental point. And as I just finished commenting on, as we start to ramp volumes, and we are, we'll start to absorb those costs. And I think we'll definitely see that number coming down in the couple of quarters following the September quarter. So I think we're in good shape there.

好的。是的。讓我從K1開始。因此，就 K1 晶圓廠的期間費用而言，我們在過去 4 個季度平均每個季度約為 6000 萬美元。然後正如我們所說，在 9 月季度，我們將增加到 8000 萬美元。所以逐漸增加，大約是 2000 萬美元。就閃現收入而言，這是一個增量點附近的某個地方。正如我剛剛完成評論的那樣，當我們開始增加產量時，我們將開始吸收這些成本。而且我認為我們肯定會看到這個數字在九月季度之後的幾個季度中下降。所以我認為我們在那裡的狀態很好。

And then in terms of volumes on the hard drive side, I mean, we're -- we definitely have plans to produce over 1 million units of 18- and 16-terabyte product. And we'll get as many of those out the door as we can this quarter.

然後就硬盤方面的容量而言，我的意思是，我們確實計劃生產超過 100 萬台 18 和 16 TB 的產品。我們將在本季度盡可能多地推出這些產品。

Yes. We're not putting a number out there for the December quarter. But I think as we said, we want to get ourselves in a position where we're up the yield curves and we've got the manufacturing capacity to really step on the gas on that node. We're doing that now. We're working -- so this quarter, the important number is to get the production up so that we can get up that curve. And of course, we'll ship as many of them as we can.

是的。我們沒有為 12 月季度提供一個數字。但我認為，正如我們所說，我們想讓自己處於收益率曲線上升的位置，並且我們擁有製造能力，可以真正踩到該節點上的天然氣。我們現在正在這樣做。我們正在努力——所以這個季度，重要的數字是提高產量，這樣我們才能爬上這條曲線。當然，我們會盡可能多地運送它們。

Thank you. Ladies and gentlemen, I'm showing we're at the bottom of the hour and drawing to a close. I would now like to turn the call back to management for any further remarks.

謝謝你。女士們，先生們，我表明我們正處於時間的最後時刻，即將結束。我現在想將電話轉回給管理層，以徵求任何進一步的意見。

Okay. Well, thank you, everybody, for taking the time to listen to Western Digital today. We look forward to talking to you throughout the quarter. Good night.

好的。好吧，謝謝大家今天抽出時間來收聽西部數據。我們期待在整個季度與您交談。晚安。

Thanks, everyone.

感謝大家。

Thanks, folks.

謝謝各位。

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.

女士們，先生們，今天的電話會議到此結束。感謝您的參與。您現在可以斷開連接。