威騰電子 (WDC) 2023 Q1 法說會逐字稿

Good day, and welcome to the Western Digital First Quarter Fiscal 2023 Earnings Conference Call. (Operator Instructions) Please note, this event is being recorded. I would now like to turn the conference over to Peter Andrew. Please go ahead.

大家好，歡迎參加西部數據2023財年第一季財報電話會議。 （操作員指示）請注意，本次會議正在錄製中。現在，我想將會議交給Peter Andrew。請開始。

Thank you, and good morning, everyone. Joining me today are David Goeckeler, Chief Executive Officer; and Wissam Jabre, Chief Financial Officer. Before we begin, let me remind everyone that today's discussion contains forward-looking statements, including product portfolio expectations, business plans and performance, demand and market trends, and financial outlook based on management's current assumptions and expectations, and as such, does include risks and uncertainties.

謝謝大家，早安。今天與我一起的還有執行長David Goeckeler和財務長Wissam Jabre。在開始之前，我想提醒大家，今天的討論包含前瞻性陳述，包括產品組合預期、業務計劃和業績、需求和市場趨勢，以及基於管理層當前假設和預期的財務展望，因此包含風險和不確定性。

We assume no obligation to update these statements. Please refer to our most recent financial report on Form 10-K filed with the SEC for more information on the risks and uncertainties that could cause actual results to differ materially. 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. With that, I'll now turn the call over to David for introductory remarks.

我們不承擔更新這些聲明的義務。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，請參閱我們向美國證券交易委員會 (SEC) 提交的最新 10-K 表格財務報告。我們今天也將提及非公認會計準則 (non-GAAP) 財務指標。非公認會計準則 (non-GAAP) 和可比較公認會計準則 (GAAP) 財務指標之間的對帳表已包含在新聞稿以及我們網站「投資者關係」部分發布的其他資料中。現在，我將把電話會議交給 David 進行開場發言。

Thank you, Peter. Good morning, everyone, and thank you for joining the call to discuss our 2023 first quarter results.

謝謝你，彼得。大家早安，感謝大家參加我們2023年第一季業績的電話會議。

I am pleased to see the Western Digital team work together to deliver revenue at the upper half of the guidance range in the midst of an incredibly dynamic and challenging macroeconomic environment. We reported first quarter revenue of $3.7 billion and non-GAAP operating income of $307 million. Our operating income performance was above the midpoint implied by our guidance and demonstrated our ability to actively respond and navigate this environment.

我很高興看到西部數據團隊齊心協力，在極具活力和挑戰性的宏觀經濟環境中，實現了高於預期範圍的營收。我們第一季營收為37億美元，非公認會計準則營運利潤為3.07億美元。我們的營運利潤表現高於預期的中位數，展現了我們積極應對和應對當前環境的能力。

Our non-GAAP earnings per share was $0.20 and included an approximately $0.30 impact due to higher-than-forecasted tax rate. Overall, the actions we have taken over the past few years are enabling us to manage through business cycle troughs more effectively and position the company to thrive as market conditions improve. These efforts have reinvigorated the Western Digital innovation engine and strengthened our product portfolio.

我們的非公認會計準則每股收益為0.20美元，其中約0.30美元的收益源自於高於預期的稅率。總體而言，過去幾年我們採取的措施使我們能夠更有效地渡過商業週期的低谷，並使公司在市場環境好轉時保持蓬勃發展。這些努力重振了西部數據的創新引擎，並增強了我們的產品組合。

In particular, we are leading the transition to SMR-based hard drives alongside our cloud customers, showcasing our product leadership. In flash, we have nearly tripled our bit shipments in the NVMe enterprise SSD product category as compared to the last down cycle, adding another large and growing end market in which we can allocate our flash bits. Our industry-leading innovation, diversified portfolio and broad go-to-market strategy across cloud, client and consumer end markets allow us to enjoy strong relationships with our customers and meet the full range of storage needs.

尤其值得一提的是，我們正與雲端客戶攜手引領向基於SMR的硬碟的轉型，展現了我們產品的領先地位。在快閃記憶體領域，與上一個市場下行週期相比，我們在NVMe企業級SSD產品類別中的位元出貨量成長了近兩倍，這為我們帶來了另一個龐大且不斷成長的終端市場，讓我們能夠將快閃記憶體位元配置到其中。我們在業界領先的創新能力、多元化的產品組合以及覆蓋雲端、客戶端和消費終端市場的廣泛市場策略，使我們能夠與客戶建立牢固的關係，並滿足全方位的儲存需求。

The breadth of markets we address also offers us unique visibility into end market demand signals which allowed us to recognize potential challenges to our business as they unfolded. We have proactively and effectively managed our business through weakening consumer demand by optimizing product mix and rightsizing our hard drive manufacturing footprint.

我們涵蓋的市場範圍也讓我們能夠洞察終端市場需求訊號，從而及時識別業務面臨的潛在挑戰。我們透過優化產品組合和精簡硬碟製造基地來應對消費者需求的減弱，從而積極有效地管理了業務。

As part of these efforts to manage through this part of the cycle, we are reducing our capital investments and operating expenses as we move to align our cash flow and cost structure with market conditions. Wissam will go over our efforts in more detail.

為了應對這一周期階段，我們正在減少資本投資和營運支出，以使我們的現金流量和成本結構與市場狀況保持一致。 Wissam 將詳細介紹我們的舉措。

As we closely monitor the macro environment, we are encouraged to see retail flash and channel demand leveling out and orders from PC customers stabilizing, a sign that consumer-led inventory correction is abating. We believe the long-term growth in flash demand, combined with reduced flash industry supply will restore supply and demand balance in the next couple of quarters.

我們密切關注宏觀環境，並欣慰地看到零售快閃記憶體和通路需求趨於平穩，PC客戶訂單也趨於穩定，這表明消費者主導的庫存調整正在減弱。我們相信，快閃記憶體需求的長期成長，加上快閃記憶體產業供應的減少，將在未來幾季恢復供需平衡。

Before I jump into updates on our HD and Flash businesses, I want to provide a short update on our strategic review process. The executive committee of our Board, which I lead, continues its process, which I previously announced includes the participation of Elliott Management under a nondisclosure agreement. Given the ongoing nature and confidentiality of the process, we will not be answering any questions about the strategic review today. We will provide updates as we have them.

在介紹高清和快閃記憶體業務的最新進展之前，我想先簡單介紹一下我們的策略評估流程。由我領導的董事會執行委員會將繼續推進其流程，我之前宣布過，Elliott Management 將根據保密協議參與其中。鑑於該流程的持續性和保密性，我們今天不會回答任何有關策略評估的問題。我們將及時更新最新情況。

Now turning to our HDD business. During the first quarter, our HDD revenue declined modestly as we had forecasted in August. Sequentially, total HDD and nearline exabyte shipments were both flat. Continued momentum with U.S. cloud customers and accelerated adoption of SMR hard drives were offset by softness in other capacity enterprise product channels and consumer HDD demand. Shipment of capacity enterprise drives based on SMR technologies exceeded 25% of this category, 1 quarter ahead of our expectations. We now expect SMR to represent over 40% of our capacity enterprise exabyte shipment exiting fiscal year 2023.

現在談談我們的HDD業務。第一季度，我們的HDD收入小幅下降，正如我們8月預測的那樣。環比來看，HDD和近線EB總出貨量都持平。美國雲端客戶持續成長的動能以及SMR硬碟的加速普及，被其他容量企業級產品通路和消費者HDD需求的疲軟所抵銷。基於SMR技術的容量企業級硬碟出貨量超過了同類產品的25%，比我們的預期高出一個季度。我們目前預計，到2023財年結束時，SMR將占我們容量企業EB出貨量的40%以上。

SMR adoption drove a 19% sequential and 21% year-over-year increase in average capacity to 17 terabytes per capacity enterprise drive, and our 20-terabyte drive exabyte shipments increased more than 150% sequentially. We are deep into the process of qualifying our latest generation of hard drives, including our 26-terabyte UltraSMR hard drives at multiple U.S. cloud and OEM customers. Interest in SMR from other hyperscalers worldwide is increasing as the 20% capacity gain offers multi-generation TCO benefits to the most complex data centers worldwide.

SMR 的採用推動平均容量較上季成長 19%，年成長 21%，達到每容量企業級硬碟 17 TB，而我們 20 TB 硬碟的 EB 出貨量較上季成長超過 150%。我們正在深入驗證最新一代硬碟，包括我們為多家美國雲端客戶和 OEM 客戶生產的 26 TB UltraSMR 硬碟。隨著 20% 的容量提升為全球最複雜的資料中心帶來多代 TCO 效益，全球其他超大規模資料中心對 SMR 的興趣日益濃厚。

Looking ahead, our U.S. cloud customers have started sharply reducing their hard drive inventory alongside other components for their data center build-outs. This, along with continued subdued demand across markets in China, will impact near-term demand over the next few quarters. Despite these near-term corrections, it is clear from our conversations with these customers that HDD products will be the foundational storage for their continued cloud build-out in the years to come.

展望未來，我們的美國雲端客戶已開始大幅削減其硬碟庫存以及其他用於資料中心擴建的組件。這一情況，加上中國市場需求持續低迷，將在未來幾季對短期需求產生影響。儘管近期有所調整，但從我們與這些客戶的溝通中可以清楚看出，HDD 產品將成為未來幾年他們持續雲端建設的基礎儲存。

Our product leadership and innovation engine remain as strong as ever, and we are confident that Western Digital's hard drive business will thrive over the long term as demand improves and new products continue to ramp.

我們的產品領導力和創新引擎依然一如既往地強勁，我們相信，隨著需求的改善和新產品的不斷推出，西部數據的硬碟業務將長期蓬勃發展。

Turning to Flash. Revenue was slightly ahead of our expectations. Thanks to our broad portfolio, diverse routes to market and leading brands, including WD Black, SanDisk and SanDisk Professional that are recognized globally for their cutting-edge innovation, performance and quality. I'm pleased to say that we exceeded our bit shipment forecast this quarter.

談到閃存。收入略高於我們的預期。這要歸功於我們廣泛的產品組合、多樣化的市場管道以及領先的品牌，包括 WD Black、SanDisk 和 SanDisk Professional，這些品牌以其尖端的創新、性能和品質而享譽全球。我很高興地宣布，本季我們的比特出貨量已超出預期。

Our client SSD products for PC OEM, retail and mobile drove the upside in bit shipments. Average capacity per client SSD increased 24% sequentially and 54% year-over-year, driven by doubling of standard storage capacity for PCs sold by multiple OEMs. This is another reminder of the insatiable demand for data storage and the resilience of flash demand as price elasticity drives increased consumption per device.

我們面向PC OEM、零售和行動市場的客戶端SSD產品推動了比特出貨量的成長。由於多家OEM廠商銷售的PC標準儲存容量翻倍，客戶端SSD平均容量較上季成長24%，較去年同期成長54%。這再次凸顯了資料儲存需求的旺盛，以及快閃記憶體需求的韌性，因為價格彈性推動了每台裝置的消費成長。

On the technology front, BiCS5 accelerated to over 2/3 of our Flash revenue in the September quarter, up from about half in the previous quarter. BiCS6 yield and development of subsequent 3D-NAND Flash are both progressing well. For the December quarter, we expect Flash shipments to increase sequentially, led by seasonal strength in retail and mobile. With the abrupt change in market conditions, we are acting decisively to adjust our supply trajectory to align with demand.

在技​​術方面，BiCS5 在 9 月季度的快閃記憶體收入佔比已從上一季的約一半上升至三月季度的三分之二以上。 BiCS6 的良率和後續 3D-NAND 快閃記憶體的開發進展順利。我們預計 12 月季度的快閃記憶體出貨量將環比成長，這主要得益於零售和行動市場的季節性強勁成長。鑑於市場情勢的急劇變化，我們正在果斷調整供應軌跡，以適應需求。

We are pushing out BiCS6 transition to meaningfully reduce our capital expenditures for fiscal year 2023 which may offer us a potential opportunity to leapfrog to a future BiCS technology node as demand normalizes. With that, let me now turn the call over to Wissam, who will discuss our first quarter results in greater detail and provide an outlook for the second quarter.

我們正在推動 BiCS6 的過渡，以大幅削減 2023 財年的資本支出，這可能為我們提供潛在的機會，以便在需求恢復正常後跨越到未來的 BiCS 技術節點。現在，請容許我將電話會議交給 Wissam，他將更詳細地討論我們第一季的業績，並對第二季進行展望。

Thank you, David, and good morning, everyone. As David mentioned, revenue was in line, thanks to our team's agility and resilience in managing through this dynamic environment. Total revenue for the quarter was $3.7 billion, down 17% sequentially and 26% year-over-year. Non-GAAP earnings per share was $0.20. And as David mentioned, included an approximately $0.30 impact due to the higher than forecasted tax rate. Looking at our end markets, cloud represented 49% of revenue at $1.8 billion, down 13% sequentially and 18% year-over-year. Compared to the prior quarter, continued momentum in capacity enterprise drives sold to U.S. cloud customers and an increase in smart video hard drives demand partly offset the decline in all other hard drive product channels and flash.

謝謝David，大家早安。正如David所提到的，由於我們團隊在這種動態環境中的敏捷性和韌性，收入保持了良好的狀態。本季總營收為37億美元，季減17%，年減26%。非公認會計準則每股收益為0.20美元。正如David所提到的，其中包括高於預期的稅率約0.30美元的影響。從我們的終端市場來看，雲端運算佔總營收的49%，為18億美元，季減13%，年減18%。與上一季相比，面向美國雲端客戶的大容量企業級硬碟銷售勢頭強勁，智慧視訊硬碟需求成長，部分抵消了所有其他硬碟產品管道和快閃記憶體的下滑。

Sequentially, nearline bit shipments were flat at 112 exabytes, driven by our success in leading the industry transition to SMR hard drives. The year-over-year decrease was due to broad-based decline across both hard drive and flash products. Clients represented 33% of total revenue at $1.2 billion, down 25% sequentially and 34% year-over-year.

近線數據出貨量環比持平，為112EB，這得益於我們成功引領產業轉型為SMR硬碟。年減則是因為硬碟和快閃記憶體產品都出現普遍下滑。客戶收入佔總營收的33%，為12億美元，季減25%，較去年同期下降34%。

Sequentially, the decline was attributed to flash driven by inventory reduction at PC OEMs and lower pricing. The year-over-year decline resulted primarily from the reduced flash pricing. Lastly, consumer represented 18% of revenue at $0.7 billion, down 15% sequentially and 30% year-over-year. On both a sequential and year-over-year basis, the revenue decline was due to flash pricing and lower retail HDD shipments.

環比下降歸因於閃存，原因是PC OEM廠商庫存減少和價格下降。年比下降主要源自於快閃記憶體價格下降。最後，消費性產品佔總營收的18%，為7億美元，較上季下降15%，較去年同期下降30%。無論是環比還是同比，營收下降均歸因於快閃記憶體價格下降和零售硬碟出貨量下降。

Turning now to revenue by segment. We reported HDD revenue of $2 billion, down 5% sequentially and 21% year-over-year. Compared to the prior quarter, total HDD exabyte shipments increased by 1% and average price per hard drive increased by 4% to $125. On a year-over-year basis, total HDD exabyte shipments decreased by 12% and average price per unit increased by 23%.

現在來看看各部門的收入狀況。我們報告稱，HDD（硬碟）收入為20億美元，季減5%，年減21%。與上一季相比，HDD EB總出貨量成長了1%，單價上漲了4%，達到125美元。與去年同期相比，HDD EB總出貨量下降了12%，單價上漲了23%。

Flash revenue was $1.7 billion, down 28% sequentially and 31% year-over-year. Sequentially, Flash ASPs were down 22% on a blended basis and 17% on a like-for-like basis. Flash bit shipments decreased 10% sequentially and 7% year-over-year.

快閃記憶體收入為17億美元，季減28%，較去年同期下降31%。快閃記憶體平均售價季減22%，年減17%。快閃記憶體比特出貨量較去年同期下降10%，較去年同期下降7%。

As we move to costs and expenses, please note that my comments will be related to non-GAAP results unless stated otherwise. Gross margin for the fiscal first quarter was 26.7%, down 5.6 percentage points sequentially and 7.2 percentage points year-over-year. Our HDD gross margin was 28.5%, up 30 basis points sequentially and down 2.4 percentage points year-over-year. Our Flash gross margin was 24.5%, down 11.4 percentage points sequentially and 12.5 percentage points year-over-year.

接下來我們討論成本和費用，請注意，除非另有說明，否則我的評論將與非公認會計準則 (Non-GAAP) 績效相關。第一財季毛利率為 26.7%，季減 5.6 個百分點，較去年同期下降 7.2 個百分點。 HDD 毛利率為 28.5%，季增 30 個基點，較去年同期下降 2.4 個百分點。快閃記憶體毛利率為 24.5%，季減 11.4 個百分點，較去年同期下降 12.5 個百分點。

Operating expenses were $689 million, down $71 million sequentially and below our guidance range due to lower variable expenses and tighter expense management, including reduction of discretionary spending. Operating income was $307 million, representing a 56% decrease from the prior quarter and a 68% decrease year-over-year. As David mentioned, we are pleased to have delivered operating income above the midpoint implied by our guidance in a challenging market backdrop.

營運費用為6.89億美元，環比下降7100萬美元，低於我們的預期範圍，這得益於可變費用的降低以及費用管理的加強，包括可自由支配支出的減少。營運利潤為3.07億美元，季減56%，年減68%。正如David所提到的，在充滿挑戰的市場環境下，我們很高興能夠實現高於預期中位數的營運利潤。

Our tax expense was $168 million, resulting in a tax rate of 72% higher than previously forecasted. Tax expense is influenced by several factors, including the projected quarterly profitability for the rest of the year and our corporate tax structure. Earnings per share was $0.20 compared to $1.78 in the prior quarter and $2.49 in the year-ago quarter.

我們的稅費支出為1.68億美元，稅率較先前預測高出72%。稅費支出受多種因素影響，包括今年剩餘時間的季度獲利預期以及我們的企業稅制結構。每股收益為0.20美元，而上一季為1.78美元，去年同期為2.49美元。

Operating cash flow for the first quarter was $6 million, and free cash flow was an outflow of $215 million. Cash capital expenditures, which includes the purchase of property, plant, equipment, and activity related to our flash joint ventures on our cash flow statement represented a cash outflow of $221 million. Our gross debt outstanding remained at $7.1 billion at the end of the fiscal first quarter.

第一季營運現金流為600萬美元，自由現金流為2.15億美元。現金資本支出（包括購置物業、廠房、設備以及現金流量表中與閃購合資企業相關的活動）為2.21億美元。截至第一季末，我們的未償債務總額仍為71億美元。

Our liquidity position continues to be strong. At the end of the quarter, we had $2 billion of cash and cash equivalents and revolver capacity of $2.25 billion. Our trailing 12-month adjusted EBITDA at the end of the first quarter, as defined in our credit agreement was $4.1 billion, resulting in a gross leverage ratio of 1.7x compared to 2x a year ago.

我們的流動性狀況持續強勁。截至本季末，我們擁有20億美元的現金及現金等價物，循環信貸額度為22.5億美元。截至第一季末，我們過去12個月的調整後EBITDA（根據我們的信貸協議定義）為41億美元，總槓桿率為1.7倍，而去年同期為2倍。

As a reminder, our credit agreement includes $0.9 billion in depreciation add-back associated with the flash ventures. This is not reflected in the cash flow statement. Please refer to the earnings presentation on the Investor Relations website for further details.

提醒一下，我們的信貸協議包含與Flash Ventures相關的9億美元折舊加回。這部分未反映在現金流量表中。更多詳情，請參閱投資者關係網站上的收益報告。

Before I go over guidance for the fiscal second quarter, I would like to discuss the business outlook for the balance of this fiscal year and the actions we are taking to align our execution plan with the changes in business environment. In Flash, we expect shipments to increase sequentially in the fiscal second quarter and the balance of the fiscal year 2023 as the market stabilizes. In HDD, we expect our revenue to recover as our U.S. cloud customers reduce their inventories over the next 2 quarters.

在介紹第二財季業績指引之前，我想先談談本財年剩餘時間的業務前景，以及我們為使執行計畫與業務環境的變化保持一致而採取的措施。在快閃記憶體方面，隨著市場趨於穩定，我們預計第二財季及2023財年剩餘時間的出貨量將較上季成長。在硬碟方面，隨著美國雲端客戶在未來兩個季度減少庫存，我們預計收入將有所回升。

On the manufacturing front, we have sharply reduced client hard drive production capacity by approximately 40%. For the fiscal year 2023, we are reducing our gross capital expenditures to $2.7 billion. We are also aiming to reduce our cash capital expenditure by 20% versus our prior expectation. The main drivers of our lower capital expenditures are primarily the push out of BiCS6 transition in Flash and reduced investments in hard drive manufacturing.

在製造方面，我們已大幅削減客戶端硬碟產能約40%。 2023財年，我們將總資本支出削減至27億美元。我們也計劃將現金資本支出較先前預期減少20%。資本支出降低的主要原因是閃存BiCS6過渡的延遲以及硬碟製造投資的減少。

As for our operating expenses, we proactively reduced our spending by approximately $80 million in the first fiscal quarter relative to the midpoint of the guidance range. We are also taking further action to lower our ongoing operating expenses range to $650 million to $700 million as we navigate this dynamic environment. We believe these actions we are taking will allow us to continue to invest in innovation as a top priority for our company going forward.

至於我們的營運支出，我們主動在第一財季削減了約8000萬美元的支出，相比指導範圍的中點有所降低。為了因應當前的動態環境，我們也將採取進一步措施，將持續營運支出範圍下調至6.5億至7億美元。我們相信，這些舉措將使我們能夠繼續將創新作為公司未來的首要任務進行投資。

For the fiscal second quarter, our non-GAAP guidance is as follows: we expect revenue to be in the range of $2.9 billion to $3.1 billion. We expect gross margin to be between 20% and 22%. We expect operating expenses to be between $650 million and $670 million. Interest and other expenses are expected to be approximately $80 million. We expect the tax benefit between $70 million and $90 million. We expect loss per share of $0.25 to earnings per share of $0.05 in the second quarter, assuming approximately 319 million fully diluted shares outstanding. I'll now turn the call back over to David.

對於第二財季，我們的非公認會計準則（Non-GAAP）指引如下：我們預計營收將在29億美元至31億美元之間。我們預計毛利率將在20%至22%之間。我們預計營運支出將在6.5億美元至6.7億美元之間。利息及其他支出預計約8000萬美元。我們預計稅收優惠將在7000萬美元至9000萬美元之間。我們預期第二季每股虧損0.25美元，每股盈餘0.05美元，假設完全稀釋的流通股數約為3.19億股。現在我將電話會議交還給David。

Thanks, Wissam. Let me briefly wrap up, and then we'll open up for questions. While near-term market conditions are challenging, digital transformation continues to drive long-term growth for data storage from client to edge to cloud. With products and solutions that play in every part of the technology ecosystem, Western Digital can meet customers' needs across the spectrum and unlock the possibilities of data.

謝謝，Wissam。我先簡單總結一下，然後開始提問。雖然短期市場環境充滿挑戰，但數位轉型仍在推動資料儲存從客戶端到邊緣再到雲端的長期成長。西部數據的產品和解決方案涵蓋了技術生態系統的各個環節，能夠滿足客戶的各種需求，並釋放資料的各種可能性。

For example, while we are successfully managing through the consumer-led downturn, which is showing signs of stabilization, we are ramping multiple new products into data centers worldwide. As we remain focused on innovation and execution, I am optimistic that Western Digital will emerge stronger as we continue to ramp multiple new products into data centers worldwide and market conditions improve. With our top-tier team innovative and diversified portfolio, broad customer base and differentiated go-to-market engine, we are uniquely positioned to capture the opportunities stemming from the rapid global adoption of the cloud and the expansive and growing ecosystem it supports.

例如，儘管我們成功應對了消費驅動的經濟低迷，目前市場已呈現穩定跡象，但我們仍在積極向全球資料中心推出多款新產品。隨著我們持續專注於創新和執行，我堅信西部數據將隨著我們持續向全球資料中心推出多款新產品以及市場環境的改善而變得更加強大。憑藉我們頂尖的團隊、創新且多元化的產品組合、廣泛的客戶群以及差異化的市場推廣引擎，我們擁有獨特的優勢，能夠抓住雲端運算及其所支援的不斷擴展和不斷發展的生態系統所帶來的機會。

Finally, I want to thank our employees for their hard work during this quarter and for solidifying our leadership in storage. In the face of an extremely challenging macro environment, our team worked together to deliver solid financial performance for Western Digital. I am proud of what this team has accomplished and excited to see what we can do together in calendar 2023 and beyond.

最後，我要感謝全體員工在本季度的辛勤工作，以及他們鞏固我們在儲存領域的領導地位。面對極具挑戰性的宏觀環境，我們的團隊齊心協力，為西部數據帶來了穩健的財務表現。我為團隊的成就感到自豪，並期待我們在2023年及以後的合作。

All right, Peter. With that, let's open it up for Q&A.

好的，彼得。好了，下面我們開始問答。

(Operator Instructions) Our first question today comes from Aaron Rakers with Wells Fargo.

（操作員指示）我們今天的第一個問題來自富國銀行的 Aaron Rakers。

I want to go into the Flash business and kind of parse out kind of how you're thinking about the gross margin trajectory into the December quarter guidance? And specifically, within that, your JV partner, Kioxia announced a couple of weeks ago that they were going to cut production by as much as 30%. I'm curious your gross margin expectations. Have you taken any actions to take out production? And with that, any underutilization charges that are baked into your expectations into the December quarter?

我想談談快閃記憶體業務，並分析您對12月季度毛利率走勢的預期。具體來說，您的合資夥伴Kioxia幾週前宣布將減產高達30%。我很好奇您對毛利率的預期。您是否採取了任何措施來削減產量？此外，12月季度的預期中是否包含任何未充分利用的費用？

Yes, Aaron, thanks for the question. We have not taken any major underutilization actions in the fab. We always reserve that right in the future, depending on market conditions. So when we look at our -- the way to think about Q4, and I'll invite calendar Q4, Wissam, to obviously make some comments. I mean we're still under a -- pricing is still under pressure. I think that's fairly clear what's going on in the market.

是的，Aaron，謝謝你的提問。我們目前沒有對晶圓廠採取任何重大的產能利用率不足措施。我們始終保留未來根據市場情況採取此措施的權利。所以，當我們展望第四季時，我會邀請Wissam就第四季發表一些評論。我的意思是，我們仍然面臨定價壓力。我認為市場的情況已經相當明朗了。

And then we've got a sequential increase, slight increase in bit shipments. So I think that's one way to think about how we're thinking about the quarter. Wissam, anything to add?

然後，我們的出貨量較上季略有成長。所以我認為這是我們對本季的展望之一。 Wissam，還有什麼要補充的嗎？

Yes. The only thing -- I mean, I think the only thing I would add, David, is yes, pricing is pretty much what's going to be the main driver of gross margin in the calendar Q4.

是的。唯一需要補充的是，大衛，定價幾乎是第四季毛利率的主要驅動因素。

And then as a quick follow-up on the hard disk drive, the nearline, it sounds like you and your competitors are going through some digestion at some of your CSP partners. What's the expectation for the December quarter? It sounds like you expect -- is the expectation is that shipments start to improve going into the March quarter at this point? And then I'll see the floor.

然後，關於硬碟和近線產品，聽起來您和您的競爭對手正在消化一些CSP合作夥伴的庫存。您對12月季的預期是什麼？聽起來您預計－預計到3月季度出貨量會開始回升嗎？然後我會看看具體情況。

Yes, we're going to -- you've got it. We're going to see a sharp decline in shipments in calendar Q4, and that's going to lead to some pretty significant absorption charges or underutilization charges. And then will grow back out of that as we move into -- as we move through '23.

是的，你懂的。第四季的出貨量將大幅下降，這將導致相當可觀的吸收費用或未充分利用費用。然後，隨著我們進入2023年，這一數字將回升。

The next question comes from C.J. Muse with Evercore.

下一個問題來自 Evercore 的 C.J. Muse。

I guess a follow-up to the prior first question around NAND. I was hoping you could speak maybe more broadly around your NAND bit allocation strategy. You spoke to no underutilization charges today. I think your NAND gross margins obviously moving lower. And in the last cycle, I think in 2019, we troughed at 19%. So curious, how are you thinking about what business you'll take, what you won't take and how that will impact, whether desire to build inventory and/or choose to cut utilization at some point?

我想跟進一下之前關於NAND的第一個問題。我希望您能更廣泛地談談您的NAND位元分配策略。您今天提到沒有未充分利用的費用。我認為您的NAND毛利率明顯在下降。在上一個週期，我想是在2019年，我們的毛利率跌到了19%的低潮。所以，我很好奇，您是如何考慮哪些業務會繼續做，哪些不會繼續做，以及這將如何影響，您是否希望建立庫存和/或選擇在某個時候降低利用率？

I think this is -- the strategy we've been executing over the last couple of years and what we've been talking about, I think, is really paying off for us now at this part of the cycle. We've worked very hard to drive the portfolio abroad and deep portfolio across consumer, across mobile. We obviously still stay qualified at all of the vendors, the client SSD portfolio is an anchor of the portfolio, gaming. And now we've added enterprise SSD into the mix. So we've always talked about we want to have a broad portfolio to be qualified everywhere we can. And then be able to mix based on what gets us to the best return. And so I think at this part of the cycle, we're able to do that.

我認為，過去幾年我們一直在執行的策略以及我們一直在談論的策略，在目前的周期階段確實為我們帶來了回報。我們一直努力推動產品組合向海外拓展，並在消費和行動領域深化產品組合。我們顯然仍然保持對所有供應商的資質認證，客戶端SSD產品組合是遊戲產品組合的支柱。現在，我們又新增了企業級SSD。所以我們一直在說，我們希望擁有一個廣泛的產品組合，以便在所有領域都獲得資格認證。然後，我們能夠根據最佳回報進行組合。所以我認為，在目前的周期階段，我們能夠做到這一點。

And it also gives us quite a few homes for our supply. So that allows us in a tough quarter, have sequential bit growth. Obviously, pricing is market-based pricing. So we participate in the market and it allows us to basically just change the mix to get the best return we can. So again, I think the portfolio strategy we've been pursuing and we've been talking about getting qualified at the hyperscalers on enterprise SSD, and that is -- that gives us another really important home for our supply. So that's how we're thinking about it.

這也為我們的供應提供了不少的歸宿。這使得我們能夠在艱難的季度中實現連續的位元成長。顯然，定價是基於市場的。因此，我們參與市場，這使我們能夠基本上改變產品組合，以獲得最佳回報。所以，我認為我們一直在推行的產品組合策略，以及我們一直在談論的在企業級SSD上獲得超大規模廠商的認證，這為我們的供應提供了另一個非常重要的歸宿。這就是我們的想法。

I think when you look across the portfolio, we have 5 or 6 categories, depending on the quarter. If you look at it for the whole fiscal year, we'll have 6 different categories where we have a double-digit mix of bits going into those different parts of the market. So I think it gives us a lot of optionality and the ability to generate the best return we can.

我認為，縱觀我們的投資組合，我們會根據季度情況，分成5到6個類別。如果縱觀整個財年，我們會有6個不同的類別，其中我們以兩位數的配比投入不同的市場領域。所以我認為這給了我們很大的選擇空間，也讓我們有能力創造盡可能高的回報。

That's very helpful. I guess, a follow-up on your technology road map. You talked about theoretically potentially skipping a node. And historically, players in the market have not done very well when they pursue that strategy. So I guess can you kind of walk through what gives you the confidence that, that's something that would make sense for you guys, just given the historical precedents?

這很有幫助。我想，我想問一下您的技術路線圖。您提到了理論上可能跳過某個節點。從歷史上看，市場上的參與者在實施這項策略時並沒有取得很好的成果。所以，您能否談談，基於歷史先例，是什麼讓您有信心認為這對您來說是合理的？

Yes. I think the way we think about it right now, BiCS6 is -- we're taking the actions around capital investment to slow down our bit supply in the market to try and get the market balance. I think everybody is doing that. There's really an enormous number of actions to try and get the market back in balance.

是的。我認為我們現在的想法是，BiCS6——我們正在採取資本投資方面的行動，以減緩市場上的比特供應，試圖實現市場平衡。我認為每個人都在這樣做。我們確實採取了大量的行動來試圖讓市場恢復平衡。

We feel good about those. We'll take effect next year as we move through the year. What it means for us is BiCS6 will be a shorter node. At this point, the follow-on node BiCS8 is progressing very, very well. And as we move through the year, we'll be able to make a judgment about how long we're going to stay on which node. There's a number of issues around qualifications of products and all those kinds of things. So we'll make thoughtful decisions about that when we get closer to that point as we move through '23, but we feel very good about where both nodes are and how they're progressing and that will give us the -- give us, again, more optionality about how we think about what products we put in the market to get us the best financial return and obviously, the best solution for our customers.

我們對此感到滿意。我們將在明年逐步實施這些措施。對我們來說，這意味著 BiCS6 將是一個更短的節點。目前，後續節點 BiCS8 的進展非常順利。隨著時間的推移，我們將能夠判斷將在哪個節點上停留多長時間。圍繞產品資質等等，存在許多問題。因此，當我們接近那個節點，也就是 2023 年時，我們會對此做出深思熟慮的決定。但我們對這兩個節點的現狀和進展都非常滿意，這將再次為我們帶來更多選擇，讓我們能夠思考如何將哪些產品投放市場，從而獲得最佳的財務回報，當然，也為我們的客戶提供最佳的解決方案。

The next question comes from Joe Moore with Morgan Stanley.

下一個問題來自摩根士丹利的喬·摩爾。

Great. Sounds like you guys are pretty optimistic that this improves. But I guess in the event that it doesn't, if earnings stay at this level for a few quarters or get worse, it looks like you might be challenged on the leverage ratio. We've talked to a bunch of people in credit, and it sounds like that's a relatively easy amendment to make that there's no strain to it, if you do it quickly. So just wondering how are you thinking about that? Are you -- and then just sort of broader, more philosophically, it feels like it's going to be a tough economic year next year, there could be a lot of challenges. But with Chinese supply out of the mix, the next NAND cycle should be pretty exciting.

太好了。聽起來你們對情況的改善非常樂觀。但我想，如果情況沒有改善，如果獲利在幾個季度內保持在這個水平甚至惡化，你們的槓桿率可能會面臨挑戰。我們和一些信貸行業的人士談過，聽起來這是一個相對容易的修正，如果行動迅速，不會造成任何壓力。所以，我想知道您是怎麼想的？從更廣泛、更哲學的角度來看，您覺得明年將是艱難的經濟一年，可能會面臨許多挑戰。但隨著中國供應的退出，下一個NAND週期應該會非常令人興奮。

So I feel like as you think about more negative scenarios, how do you think about weathering the storm and making sure that the kind of $15 of earnings power you did a few years ago is something we might see in the future?

因此，我覺得當您考慮更多負面情況時，您會如何考慮渡過難關並確保我們在未來能夠看到幾年前 15 美元的盈利能力？

Yes. Joe, thanks for the question. So with respect to the first part of your question, look, we're -- we entered this down cycle in a very much stronger financial position than the previous one. If you recall, we reduced our debt by $2.7 billion. We've improved the earnings power of the business. We strengthened our portfolio. And also, if you look at our liquidity at the end of Q1, we had around $4.3 billion between a little bit more than $2 billion of cash and cash equivalents and the $2.25 billion revolver that's undrawn.

是的。喬，謝謝你的提問。關於你問題的第一部分，你看，當我們進入這個下行週期時，財務狀況比上一個週期強得多。如果你還記得的話，我們減少了27億美元的債務。我們提高了業務獲利能力。我們增強了投資組合。而且，如果你看看我們第一季末的流動性，我們大約有43億美元，其中現金和現金等價物略多於20億美元，還有22.5億美元的未動用循環信貸額度。

So we have ample liquidity to operate within the -- in the next few quarters. And from where we are now, we're very comfortable in terms of the continued profitability of the business.

因此，我們有充足的流動性來維持未來幾季的營運。從目前的狀況來看，我們對業務的持續獲利能力非常有信心。

Joe, and just to add to that, I mean, we're thinking about how you are. I mean, look, we've got a -- we've got to get through this phase of the cycle. I think there's been a lot of discussion about everything from reduced utilization to pushing out CapEx. To your point, there are some regulations that are going to impact supply in the market in '23. So we're optimistic about the next cycle about getting there. The market is all the -- we're reacting strongly to get supply and demand back in balance.

喬，補充一下，我想說，我們正在考慮你的情況。我的意思是，你看，我們必須度過這個週期階段。我認為，從降低利用率到削減資本支出，各方面都有很多討論。正如你所說，一些法規將在2023年影響市場供應。所以我們對下一個週期的到來持樂觀態度。市場正在做出強烈反應，以恢復供需平衡。

So -- but we -- as Wissam said, we've invested in our balance sheet. We've invested in innovation in our portfolio to build the resiliency and the agility in the business to manage through this.

所以——但是我們——正如Wissam所說，我們已經投資了我們的資產負債表。我們已經投資了投資組合的創新，以增強業務的彈性和敏捷性，從而應對這項挑戰。

(Operator Instructions) The next question comes from Toshiya Hari with Goldman Sachs.

（操作員指示）下一個問題來自高盛的 Toshiya Hari。

I had a question on the NAND business as well. So David, based on the CapEx decisions you've made over the past couple of months, how should we think about your bit supply growth in, say, calendar '23. Obviously, you've got bits on your balance sheet. But on a manufacturing basis, given the decisions you've made, how should we think about bit supply growth. And it seems like you're not cutting production like many of your other peers. I guess my question is, why not? Is that a function of the contaminant issue earlier in the year and you're looking to regain some ground? Or is there something else?

我也對NAND業務有疑問。 David，根據您過去幾個月所做的資本支出決策，我們該如何看待你們在2023年的比特供應成長？顯然，你們的資產負債表上已經包含了比特供應。但從製造角度來看，考慮到你們所做的決策，我們該如何看待比特供應的成長？而且看起來你們並沒有像其他許多同行那樣減產。我的問題是，為什麼不減產？這是由於今年早些時候的污染物問題，你們希望收復一些失地嗎？還是有其他原因？

No, it's -- on the second part of your question, it's not because of that at all. It's because we have a lot of homes for our supply, and we're able to get, we think, a good economic return for that. So from -- just purely from an economic point of view, it makes sense for us to continue to build the supply. We're definitely going to slow down our bit supply. I think you can think like low to mid-20s for supply next year is kind of the way we're thinking about it.

不，關於你問題的第二部分，完全不是因為這件事。而是因為我們的供應量很大，而且我們認為這能帶來不錯的經濟回報。所以，純粹從經濟角度來看，我們繼續增加供應量是合理的。我們肯定會放慢比特供應的速度。我認為，明年的供應量大概在20%左右，這是我們目前考慮的程度。

The next question comes from Wamsi Mohan with Bank of America.

下一個問題來自美國銀行的 Wamsi Mohan。

I wanted to go back to your initial comments around consumer stabilization. I know you alluded to some points around retail and PC orders. And I was hoping that you can maybe double click a little bit on what you're seeing both in retail and PC orders, specifically. And also perhaps touch on your expectation of inventory levels exiting the December quarter.

我想回到您最初關於消費者穩定性的評論。我知道您提到了一些關於零售和PC訂單的問題。我希望您能具體談談您在零售和PC訂單方面看到的情況。或許您還能談談您對12月季度庫存水準的預期。

So let me take the first part, and I'll ask Wissam to comment on inventory. If we go back and we look at kind of the progression of what's happened this year, back in March, we -- roughly the March time frame, we saw the consumer market come under pressure. We talked a lot about that. In, let's call it, the June time frame, we saw the PC OEMs really start adjusting their inventory very aggressively. We talked about that last quarter. And we've seen that play out during the quarter now in a number of different fronts.

那麼，讓我先談第一部分，請 Wissam 對庫存問題發表評論。如果我們回顧一下今年 3 月的情況，我們——大概在 3 月的時間段裡，我們看到消費市場面臨壓力。我們對此進行了很多討論。在 6 月份，我們看到 PC OEM 廠商開始積極調整庫存。我們在上個季度討論過這個問題。現在，我們已經看到這種情況在本季在多個方面顯現。

And then just within the last month or 2, we've started to see the big data center operators do the same thing, really sharply adjust their inventory. And obviously, that's factored into our guide. So we've seen this kind of rolling change as it goes through one market to the next. If you look at the other side of it, where are they at in that process, consumer market, we're seeing relatively predictable behavior. It's not like it's at a great point, but it's not falling the way it was. Our ability to predict where it's going to be week-over-week and month-over-month have increased. And so we've got more confidence. We understand where that market is at and how it's going to play out going forward.

就在過去一兩個月裡，我們開始看到大型資料中心營運商也在做同樣的事情，大幅調整庫存。顯然，這已經計入我們的指南中。所以我們看到這種滾動變化從一個市場蔓延到另一個市場。如果你看看另一個方面，看看它們在這個過程中處於什麼位置，在消費市場，我們看到的行為相對可預測。雖然它目前還沒有達到一個很好的水平，但也沒有像以前那樣下滑。我們預測週環比和月環比走勢的能力有所提升。因此，我們更有信心。我們了解這個市場的現況以及未來的發展方向。

In the PC market and see Q4, we're actually going to see some sequential growth in units of client SSD, not a huge amount, but it's sequential growth. Again, we talked about a very, very sharp inventory correction. So we're starting to see -- we're getting to the point there where the -- the inventory correction last quarter was quite severe, I mean, when customers going down to less than 10% of their usual demand. Now we see things coming back and stabilizing a little bit.

在PC市場，就第四季度而言，我們實際上會看到客戶端SSD出貨量出現一些環比增長，雖然增幅不大，但確實環比增長。我們之前提到過庫存調整非常劇烈。所以我們開始看到——我們正處於一個關鍵點——上個季度的庫存調整相當劇烈，我的意思是，客戶需求下降到正常水平的10%以下。現在我們看到情況正在回升，並且略有穩定。

So I don't want to leave you with the impression that things are back up and to the right, but they're stabilizing a bit, and we're starting to see some signs that we're getting more predictable behavior and then that we can then grow out at this point. Obviously, the data center, the big U.S. hyperscalers were just kind of going into that. And we'll have more to say as we -- it's going to be a couple of quarters, but we'll have more to say as we go through the quarter of what we're seeing and then what we see going into next quarter. Inventory?

所以我不想讓大家覺得情況已經回升，正在好轉，但情況正在逐漸穩定下來，我們開始看到一些跡象，表明我們的行為正在變得更加可預測，並且我們可以在此時實現增長。顯然，資料中心，美國的大型超大規模資料中心營運商，都剛進入這個階段。隨著我們——這需要幾個季度——我們將有更多的消息要透露，但隨著我們回顧本季的情況，以及對下個季度的展望，我們將有更多的消息要透露。庫存？

Yes. And on the second part of the question, Wamsi. In Q1, we saw approximately a couple of hundred million dollars of growth in inventory at the end of the quarter. Our days of inventory were at 128. We're expecting to see a similar type of trends in the calendar Q4, roughly speaking, let's say, $100 million to $200 million growth and a bit of an increase in our days of inventory.

是的。關於問題的第二部分，Wamsi。在第一季度，我們季度末的庫存增加了大約幾億美元。我們的庫存天數為128天。我們預期第四季也會出現類似的趨勢，大概成長1億到2億美元，庫存天數也會略有增加。

The next question comes from Timothy Arcuri with UBS.

下一個問題來自瑞銀的提摩西‧阿庫裡。

I had a question, and then I had a clarification. So the question is on NAND cost. And the question really is sort of what the push out of BiCS6 does to your longer term? And when I say longer term, I mean like inside of calendar '23 and into '24, like what that does to your NAND cost curve? You've been bringing costs down mid-teens. I know it's going to be less than that next year. But what is the push out due to your cost curve?

我之前有個問題，後來想澄清一下。所以問題是關於NAND成本的。真正的問題是，BiCS6的推出對你們的長期計畫有什麼影響？我說的長期計劃，是指從2023年到2024年，這對你們的NAND成本曲線有什麼影響？你們一直把成本降到15%左右。我知道明年會更低。但是，成本曲線帶來的推升效應是什麼呢？

And then I wanted to clarify on the HDD margin assumption for December, can you sort of disaggregate a little bit what you think HDD margins will be for December like what's implied? It seems like gross margin is down to smidge that's being implied in your guidance?

然後我想澄清一下12月硬碟利潤率的假設，您能否稍微分解一下，您認為12月份硬碟利潤率會是多少，例如隱含的利潤率是多少？看起來毛利率下降了一點點，這在您的指引中有所暗示？

Yes. On NAND cost, when we went through the CapEx exercise, we obviously kept a very close eye on still being able to drive cost declines. It's a very important element of the whole model of what we're doing here. So we're still comfortable with you modeling 15% year-over-year cost declines.

是的。關於NAND成本，當我們進行資本支出演習時，我們顯然非常密切地關注著是否能夠繼續推動成本下降。這是我們目前所做整個模型中非常重要的元素。因此，我們仍然相信您提出的成本比去年同期下降15%的模型。

I mean, clearly, there'll be some variability from quarter-to-quarter, but we still target that 15% year-over-year. It's a big part, I've talked about this a lot in the past. It's an actual input into the process -- into the design process, not an output. And so we really designed to meet that, and it's a strong part of what we're -- what the whole business is about.

我的意思是，顯然每季都會有一些變化，但我們的目標仍然是年增15%。這很重要，我之前已經多次談到這一點。這是對設計流程的實際投入，而不是產出。所以我們的設計確實是為了滿足這個目標，這也是我們整個業務的重要組成部分。

HDD margins will be under pressure next quarter. We will have -- as I said before, we'll have some significant underutilization costs that will go into the financials. The other side of that is pricing in nearline and capacity enterprise has been stable, benign about what we expect. But we're clearly going to have to -- we're going to slow down production significantly, and that will hit us in the margin line next quarter.

下個季度，HDD 的利潤率將面臨壓力。正如我之前所說，我們將面臨一些重大的未充分利用成本，這些成本將計入財務報表。另一方面，近線和容量企業級產品的定價一直保持穩定，符合我們的預期。但我們顯然必須大幅放緩生產速度，這將影響我們下個季度的利潤率。

And then we'll grow out of that as volume comes back. And as we go through '23, we also feel very -- we feel very good that we're going to be ramping into the 22-terabyte drive, which is deep in qualification at a lot of different places around the world. And also the 26-terabyte UltraSMR drive is in qualification as well.

隨著產量回升，我們就會擺脫這種困境。隨著2023年的發展，我們也非常有信心——我們將大力發展22TB的硬碟，這款硬碟已經在世界各地的許多地方進行了深入的認證。此外，26TB的UltraSMR硬碟也正在認證中。

And we talked a lot about SMR in the prepared remarks, that is a technology we believe very strongly. That's the next phase of the data center is SMR. And it was -- just last quarter, we talked about ending the year with 25% of our exabytes in that market being SMR, and we achieved that a quarter early. And now we expect to exit the fiscal year with over 40% of our exabytes being shipped on SMR. So I feel really good about where the portfolio is. And as we grow out of this sharp inventory correction through '23, we'll be going into strength in the product road map.

我們在準備好的演講稿中多次談到SMR，我們非常看好這項技術。資料中心的下一階段就是SMR。就在上個季度，我們曾談到年底SMR市場25%的EB數據將用於SMR，而我們提前一個季度就實現了這一目標。現在，我們預計本財年結束時，SMR出貨量將超過40%。因此，我對目前的產品組合狀況感到非常滿意。隨著我們走出2023年庫存的大幅調整，我們將在產品路線圖上進一步加強。

The next question comes from Shannon Cross with Credit Suisse.

下一個問題來自瑞士信貸的香農·克羅斯。

I'm just wondering, can you talk a bit about the pricing environment, both in NAND and drives and how both -- you expect the prices to move from an absolute basis and then also from a mix basis as the 22, 26, et cetera, comes out over time. I'm just wondering how we should sort of think about that.

我只是想知道，您能否談談NAND和驅動器的定價環境，以及兩者如何——您預計價格會從絕對價格變動，然後隨著22、26等等價格的出現，價格也會從混合價格變動。我只是想知道我們應該如何看待這個問題。

Pricing in HDD has been something we've been very much focused on. We feel very, very positive about the innovation we're bringing to market. I mean that's where all -- everything about pricing starts with innovation. You got to bring a great product to market. You got to continue to drive a better value proposition for our customers. And we believe strongly we're doing that. These new drives have very good TCO benefits for the largest data center operators in the world.

我們一直非常關注硬碟的定價。我們對即將推向市場的創新充滿信心。我的意思是，定價的一切都源自於創新。你必須將優秀的產品推向市場。你必須持續為客戶提供更有價值的主張。我們堅信我們正在做到這一點。這些新硬碟將為全球最大的資料中心營運商帶來非常顯著的總體擁有成本 (TCO) 效益。

So pricing in nearline has been, I think, benign is the word I've used for many quarters now, and I would continue to use that word. And we're going to be focused on value-based pricing as we ramp into 2022 and '26. So that's the way we're thinking about it. Again, it's all about driving a better TCO value proposition through innovation, and then we get to share the benefit of that with our customers.

所以，我認為近線儲存的定價「良性」是我已經用了好幾季的詞，而且我會繼續用這個詞。在邁向2022年和2026年的過程中，我們將專注於基於價值的定價。這就是我們的想法。再次強調，這一切都是為了透過創新來推動更好的TCO價值主張，然後我們將與客戶分享由此帶來的好處。

In NAND, pricing has clearly been under pressure. I think that's very well documented. As I said before, that -- look at our pricing last quarter, like-for-like, minus 17%; blended, minus 22%. We're clearly mixing -- the mix hurts the pricing a bit, but it also allows us to move a lot of supply and we think it's the right decision for the business. We expect pricing to be under pressure in calendar Q4 as well.

在NAND領域，定價顯然一直承受著壓力。我認為這是有據可查的。正如我之前所說，看看我們上個季度的定價，年減了17%，混合下降了22%。我們顯然是在混合供應——這種混合供應對定價造成了一些影響，但也使我們能夠調動大量供應，我們認為這對業務來說是正確的決定。我們預計第四季的定價也將面臨壓力。

The next question comes from Krish Sankar with Cowen and Company.

下一個問題來自 Cowen and Company 的 Krish Sankar。

I had a quick one on SMR. Can you talk a little bit about how to think about SMR in terms of your revenue mix and also how many customers do you have? And are you seeing any nearline HDD share shifts because of your SMR position?

我快速地問了一個關於SMR的問題。您能否從收入結構的角度談談如何看待SMR？您有多少客戶？由於SMR的佈局，您是否看到近線HDD市場佔有率有所變化？

Yes. We don't talk about specific customers, but what I can say is there's multiple very large customers committed to SMR. Some of the largest data center operators in the world. And I think the whole industry is -- especially UltraSMR, I mean, SMR has been around a long time, right? SMR has been shipped in client drives for a long time, but it actually requires some work on the host side for the data center operators. So when we were able to introduce UltraSMR and get plus 20% on a CMR drive versus the industry standard of plus 10%, that really changed the equation a bit. And when you can get 20% capacity uplift, it's worth the investment on the host side, and we're seeing that move across a lot of operators be very interested in that. So we don't break out specific customers.

是的。我們不會談論特定的客戶，但我可以說的是，有多個非常大的客戶致力於 SMR，其中包括一些全球最大的資料中心營運商。我認為整個行業——尤其是 UltraSMR，我的意思是，SMR 已經存在很長時間了，對吧？ SMR 已經在客戶端硬碟中應用了很長時間，但實際上，它需要資料中心營運商在主機端做一些工作。因此，當我們能夠引入 UltraSMR，並在 CMR 硬碟上獲得 20% 的容量提升，而業界標準是 10% 的容量提升時，這確實改變了一些情況。當你能夠獲得 20% 的容量提升時，在主機端進行投資是值得的，我們看到很多運營商對此非常感興趣。所以我們不會單獨列出具體的客戶。

I said on an exabyte basis, we expect it to be over 40% exiting the fiscal year. I think you can assume on a revenue basis, it will be slightly more than that, but I think that's how we think about it.

我之前說過，以EB計算，我們預期本財政年度結束時的佔比將超過40%。我想你可以假設，以收入計算，實際佔比會略高一些，但我想這就是我們的想法。

The next question comes from Mehdi Hosseini with SIG.

下一個問題來自 SIG 的 Mehdi Hosseini。

I also have one question, 2 parts. With your wafer purchase based on cost plus and given continued weakness in NAND prices, how is that going to impact your margin? There was a reference earlier of a minimum margin of 19% and I just want to make sure that we understand that there is that minimum gross margin given the fact that you actually purchase wafer from the JV? And on the HDD side, as you think about the dynamics, if we're actually seeing the bottom into next year. How are you planning for your capacity? And what kind of the exabyte growth are you forecasting for your HDD manufacturing capacity that you have online? In other words, how are you thinking about your HDD capacity? What kind of assumption for shipments do you have?

我還有一個問題，分成兩個部分。由於你們的晶圓採購是基於成本加成，而NAND價格持續疲軟，這將如何影響你們的利潤率？之前提到最低利潤率為19%，我只是想確保我們理解，考慮到你們實際上是從合資公司購買晶圓，所以存在這個最低毛利率。在HDD方面，考慮到市場動態，如果我們真的看到明年的底部，你們是如何規劃產能的？你們預測目前線上的HDD產能將成長多少EB？換句話說，你們是如何考慮HDD產能的？你們對出貨量有什麼預期？

All right. Let me -- I'll make some comments here and then I'm sure Wissam will probably have something to add as well. So first of all, let's clarify the comment on gross margin. There is no minimum gross margin. I think the comment was that in the last down cycle, the company's gross margin bottomed at 19% in Flash. I will note that, that number did not include the underutilization charges. And when you include the underutilization charges, Wissam, I know we calculated this number. It was...

好的。我先說幾點，然後我相信Wissam可能也會有補充。首先，我們來澄清一下關於毛利率的評論。沒有最低毛利率。我記得我評論說，在上一個經濟下行週期，公司Flash業務的毛利率跌至19%的谷底。需要注意的是，這個數字不包括未充分利用的費用。 Wissam，我知道，如果算上未充分利用的費用，我們計算了這個數字。它是…

Yes, we're in the sort of, let's say, between the -- it's in the low teens.

是的，我們處於某種程度上，可以說，在青少年時期。

Low teens.

青少年以下。

It is in the low teens.

目前溫度在十幾歲左右。

Okay. So I think that was just -- Mehdi, I just think that was a benchmark that one of the previous questioners was using. So you're right about how we get -- how we -- the JV economics work? But again, our -- the way we think about the portfolio is if we can get -- if we have a home for the bits, that's number -- that's the first thing, like do we have a place where we can, do we have customers that value our innovation in our portfolio, and we have a place to put the supply and then we look at pricing, and then we look at that equation and does it make economic sense to do that, and we drive the portfolio there.

好的。 Mehdi，我認為這只是先前提問者使用的基準。所以你關於我們如何實現合資企業經濟效益的說法是對的嗎？但是，我們思考產品組合的方式是，我們能否找到一個地方來存放這些部件，這是數字——這是首要考慮的問題，比如我們是否有一個地方可以存放這些部件，是否有客戶重視我們產品組合中的創新，是否有地方存放供應，然後我們考慮定價，然後我們研究這個等式，這樣做是否具有經濟意義，並以此為基礎來推動產品組合。

We were actually -- given where we are in the cycle, we're pleased with the gross margin we're able to drive in the business at this point. So that's how we're thinking about it. Exabyte growth, I mean, clearly, we're going to slow down ACD exabyte growth. I think this -- the industry is going through a pretty large digestion cycle. Part of the CapEx pushout that Wissam talked about the lion's share of that is on the flash side of the business, but we're also moving out ACD CapEx as well to slow down our exabyte growth there.

事實上，考慮到我們目前所處的周期階段，我們對目前能夠實現的毛利率感到滿意。這就是我們的想法。 EB級成長，我的意思是，顯然，我們將減緩ACD EB級成長。我認為，這個產業正在經歷一個相當大的消化週期。 Wissam提到的資本支出削減，其中很大一部分是在快閃記憶體業務方面，但我們也會削減ACD EB級資本支出，以減緩該業務的EB級成長。

We have a lot of conviction that the market is still going to grow in that high 20, 30-plus range on exabyte growth, but we're going to have to grow back into that as we go through this inventory correction.

我們堅信，市場仍將以 20、30 以上的 EB 級速度成長，但隨著我們經歷庫存調整，我們必須重新回到這一水平。

The next question comes from Harlan Sur with JPMorgan.

下一個問題來自摩根大通的 Harlan Sur。

On the inventories, 6% sequential growth, and I know you guys expect more sequential growth in inventories this quarter. Was -- is the build more flash or HDD driven? I'm talking about the September quarter? And then given the sharp pullback in the cloud, you guys are cutting utilizations in HDD this quarter, but are you guys also holding back shipments of HDD in the December quarter? And then on the NAND side, despite the sequential growth for bits in flash, are you guys holding back some shipments in the December quarter?

庫存方面，季增了6%，我知道你們預計本季庫存還會有更大的環比成長。增產主要來自快閃記憶體還是HDD？我指的是9月季。考慮到雲端運算業務的大幅下滑，你們本季削減了HDD的利用率，但你們是否也抑制了12月份季度HDD的出貨量？ NAND方面，儘管快閃記憶體容量環比成長，但你們是否抑制了12月份季度的部分出貨量？

So let me take the question. So with respect to inventory in the September quarter, the majority of the inventory growth was in NAND. On the HDD side, we were mostly flattish. As we look into the December quarter, we're expecting to continue to see more NAND inventory growth. And there will be some HDD inventory growth, but not as much as we're anticipating to see NAND growth there.

那麼，讓我來回答這個問題。就9月季度的庫存而言，大部分庫存成長來自NAND。在HDD方面，庫存基本持平。展望12月季度，我們預期NAND庫存將持續成長。 HDD庫存也會有所成長，但增幅不會像我們預期的那麼大。

The HDD growth will be basically just driven by the weakness we're seeing in the market. But also we will -- we're carefully managing our utilization. There will be under absorption costs, but we're also trying to carefully manage our utilization going forward. And in terms of the part of the question with respect to holding shipments, no, we're not planning to hold shipments.

HDD 的成長基本上將僅僅受到我們所看到的市場疲軟的推動。但我們也會——我們正在謹慎管理我們的利用率。可能會出現吸收成本不足的情況，但我們也會努力在未來謹慎管理我們的使用率。至於你提到的關於暫停出貨的部分，不，我們不打算暫停出貨。

The next question comes from Tom O'Malley with Barclays.

下一個問題來自巴克萊銀行的湯姆奧馬利。

You guys have seen a pretty long stretch year of seeing HDD ASPs on the rise. Obviously, with a lot of moving parts with the weakness that you're seeing, could you guys comment on what you expect HDD ASPs as a whole? You report the number every quarter to do sequentially? Is it falling because of mix? Or is there any puts and takes that we need to be considering when we look at the December guidance?

你們已經見證了HDD平均售價在相當長的一年裡持續上漲。顯然，由於諸多因素的影響，你們看到的疲軟態勢也不樂觀。能否談談你們對HDD平均售價整體的預期？你們每季都會公佈季度數據，是為了實現環比成長嗎？價格下降是因為各種因素造成的嗎？或者，在展望12月的業績指引時，我們需要考慮哪些優缺點？

Yes. The transition is primarily driven by mix. Yes, that's the driver for the ASP.

是的。轉型主要由產品組合驅動。是的，這是平均售價（ASP）的驅動因素。

Yes. So Tom, if you look at calendar Q4, you should expect ASP for HDDs to be down, mainly driven by mix as the hyperscale guys go through the digestion phase.

是的。所以湯姆，如果你看一下第四季的數據，你應該會發現硬碟的平均售價會下降，這主要是因為超大規模廠商正處於消化階段，而混合因素的影響。

The next question comes from Jim Suva with Citi Group.

下一個問題來自花旗集團的 Jim Suva。

You mentioned Q4 will be -- or December quarter will be burdened with underutilization charges, is that kind of the brunt of it, the worst or the most amount to be absorbed there and then we start to improve going after? Or does it continue and you mentioned CapEx, you're slowing that down. Could you quantify or give us some CapEx guidance about what we should kind of anticipate for CapEx and for modeling cash flow around CapEx?

您提到第四季——或者說12月季度——將承受未充分利用的費用，這是最嚴重、最需要消化的損失，還是之後我們會開始改善？或者這種情況會持續下去，正如您提到的資本支出，您正在減緩這一進程。您能否量化或給我們一些資本支出指導，關於我們應該如何預期資本支出以及如何圍繞資本支出建模現金流？

Yes. So on the comment with respect to underutilization, yes, from where we stand today, this seems to be the -- where we see probably underutilization at its lowest, and we would start getting ourselves out of that as demand improves. With respect to CapEx, we are aiming to reduce our cash CapEx for the fiscal year by 20%. Ideally, we want to do more.

是的。關於產能利用率不足的問題，是的，從我們目前的情況來看，這似乎是產能利用率最低的時候，隨著需求的改善，我們會開始擺脫這種困境。關於資本支出，我們的目標是將本財年的現金資本支出減少20%。理想情況下，我們希望減少更多。

The way to think of it is in our cash CapEx, the 20% is roughly split around 30% reduction with -- and these are relative to our previous expectations. So 30% lower than previously expected on the NAND side and on the HDD side, it's a reduction of 10% to 15% relative to the previous expectations.

我們可以這樣想：在我們的現金資本支出中，20% 的削減大約相當於 30% 的削減——這些是相對於我們先前的預期而言的。 NAND 方面比先前的預期低 30%，而 HDD 方面則比先前的預期低 10% 到 15%。

The next question comes from Sidney Ho with Deutsche Bank.

下一個問題來自德意志銀行的 Sidney Ho。

I want to ask about the free cash flow expectation. What is your expectation for the December quarter and for fiscal '23 and perhaps the kind of trajectory of how things go? And maybe I'll throw this one in too. When you look at the inventory still going up next quarter, are you concerned about inventory write-downs, especially given the main gross margin? I think it was 25% probably going down for a couple more quarters?

我想問一下自由現金流的預期。您對12月季和2023財年的預期是什麼？未來發展趨勢如何？或許我也會順便問一下這個問題。考慮到下個季度庫存仍在增加，您是否擔心庫存減記，尤其是考慮到主要毛利率？我認為25%的毛利率可能會在未來幾季下降？

Yes. So Sidney, for free cash flow, we're projecting a negative free cash flow in the December quarter and for the fiscal year. Keep in mind that we have the IRS settlement payment that is still projected to be in the fiscal '23 and this was estimated at $600 million to $700 million.

是的。西德尼，就自由現金流而言，我們預計12月季度和整個財年都將出現負自由現金流。請記住，我們還有國稅局的和解金，預計在2023財年支付，這筆款項預計在6億到7億美元之間。

With respect to inventory, look, the -- we did see a small impact in terms of write-down in the September quarter. Ultimately, it all depends on how the NAND pricing develops in the next few quarters. So it's difficult to predict at this time, but it will depend on where the NAND pricing progresses.

關於庫存，我們確實看到了9月份季度的減記小幅影響。最終，這一切都取決於未來幾季NAND定價的走勢。因此，目前很難預測，但這將取決於NAND定價的走勢。

The next question comes from Ananda Baruah with Loop Capital.

下一個問題來自 Loop Capital 的 Ananda Baruah。

David, just interested in hearing what you're seeing and what your thoughts are with regards to nearline demand from your OEM customers that might go the on-premise spending?

David，我只是想聽聽您所看到的情況，以及您對 OEM 客戶的近線需求（可能會影響內部支出）的看法？

Yes. I would say those are under pressure as well. I mean, I think across the whole data center business, we see pressure on that part of the market, both from the OEM side and the hyperscalers. I would say the hyperscaler is a little more severe correction, but we're seeing pressure on both sides of the data center business.

是的。我想說這些也面臨壓力。我的意思是，我認為在整個資料中心業務中，我們看到這部分市場面臨壓力，既來自原始設備製造商（OEM）方面，也來自超大規模資料中心營運商。我想說超大規模資料中心營運商的調整幅度更大一些，但我們看到資料中心業務的兩方面都面臨壓力。

The next question comes from Karl Ackerman with BNP Paribas.

下一個問題來自法國巴黎銀行的卡爾‧阿克曼。

I was hoping you could discuss the run rate level of OpEx for the next few quarters. And as you address that question, how much of the $70 million improvement this quarter is from the 40% reduction in hard drive capacity versus changes in accounting for R&D and NAND? As well as could you touch on your ability to redeploy heads and media production into cloud products where demand should grow very well on a structural basis going forward?

我希望您能討論一下未來幾季的營運支出運行率水準。您在回答這個問題時，請問本季7000萬美元的改善中，有多少是來自硬碟容量減少40%，還是來自研發和NAND會計的變化？此外，您能否談談貴公司將磁頭和介質生產重新部署到雲端產品的能力？雲端產品的需求在未來的結構性基礎上應該會大幅成長。

Yes. So with respect to the run rate of OpEx, when you look at -- maybe I'll talk a little bit about where we ended in Q1 because this is a bit relevant on how we think about it going forward. So in Q1, we saw approximately $70 million to $80 million actually drop from the prior quarter. So we ended at around $689 million. We took action on variable expenses and nondiscretionary spend. Basically, we are tightening the -- totally the expenses management. As we look forward for the next few quarters, the run rate is expected to be $650 million to $700 million. And we're still contemplating a few other actions that we -- that may help us keep things even tighter. So that's the run rate.

是的。關於營運支出的運作率，我想先簡單談談我們第一季的收盤價，因為這與我們未來的發展方向息息相關。第一季度，我們實際上比上一季下降了約7000萬到8000萬美元。所以最終的收盤價約為6.89億美元。我們對變動性支出和非自由支配性支出採取了措施。基本上，我們正​​在全面加強費用管理。展望未來幾個季度，預計運行率將在6.5億到7億美元之間。我們仍在考慮其他一些措施，這些措施可能有助於我們進一步控製成本。以上就是運轉率。

On the part of the question related to the client capacity restructuring. The OpEx does not reflect that. This mostly -- the impact of that is mostly on the cost of goods sold. And what -- with the reduction of approximately 40% of our capacity, we expect to see on an annual basis, roughly $45 million to $50 million benefit. So that's, roughly speaking, a little bit more than $10 million, let's call it, around $10 million to $12 million a quarter.

關於客戶產能重組的問題，營運支出並沒有反映這一點。這主要影響到銷售成本。隨著產能減少約40%，我們預計每年將獲得約4,500萬至5,000萬美元的收益。粗略地說，這略高於1000萬美元，我們姑且稱之為，每季約1000萬至1200萬美元。

In terms of the last part of the question on the heads and media, they -- some of this capacity is fungible. And we -- part of our capital investment was to continue to invest in our heads and media to ensure we have the capacity to drive the -- or supply the growth expected in the future. But as we talked about that also, we are managing our capital expenditures over the next few quarters to manage our cash flow.

關於最後一部分關於磁頭和介質的問題，其中一些產能是可替代的。我們的資本投資部分是為了繼續投資於磁頭和介質，以確保我們有能力推動或滿足未來預期的成長。但正如我們之前討論的那樣，我們正在管理未來幾季的資本支出，以管理我們的現金流。

I think you've got the heads set right, which is in the transition from client to cloud. We move all the heads and media over to cloud. We've been in that transition for a long time. We're very, very deep in that. I would say we're in the last stages of that transition. So simple thing, with client drives have a lot more disks and heads in them, and we use all that capacity.

我認為你已經把磁頭設定好了，現在正處於從客戶端到雲端的過渡階段。我們將所有磁頭和媒體都遷移到雲端。我們已經在這個過渡階段進行了很長時間，並且已經非常深入。我想說，我們正處於過渡的最後階段。很簡單，客戶端磁碟機中有更多的磁碟和磁頭，我們會充分利用這些容量。

The next question comes from Mark Miller with Benchmark Company.

下一個問題來自 Benchmark Company 的 Mark Miller。

You saw a decline in cash in the current quarter. And you're talking about negative free cash flow. Where do you think cash will be at the end of December quarter and the year?

您發現本季現金有所下降。您說的是負自由現金流。您認為到12月底以及年底，現金狀況會如何？

Yes. So I won't necessarily guide to a cash number, but we're expecting a negative free cash flow quarter in the calendar Q4. From a liquidity perspective, look, we've -- we ended the Q1 at $4.3 billion with around $2 billion of cash and we still have $2.25 billion of revolver. And so from a liquidity perspective, we're comfortable in the ability for us to continue to operate comfortably.

是的。所以我不一定會給出具體的現金數字，但我們預計第四季度的自由現金流將為負值。從流動性角度來看，我們第一季的現金流為43億美元，其中現金約20億美元，而且我們還有22.5億美元的循環信貸額度。因此，從流動性角度來看，我們有足夠的信心繼續保持良好的運作。

This concludes our question-and-answer session. I would like to turn the conference back over to David Goeckeler for any closing remarks.

我們的問答環節到此結束。現在請David Goeckeler做最後總結發言。

All right. Thanks, everyone, for joining us. Look, we'll be talking to all of you throughout the quarter. We appreciate your participation in the call. It's obviously a very dynamic environment we're all facing out there. I feel really good about the way we've been navigating this. Hopefully, we've given you some good color about how we're thinking about the business going forward.

好的。感謝各位的參與。我們會在整個季度與大家保持溝通。感謝您的參與。顯然，我們都面臨著一個非常動態的環境。我對我們目前的應對方式感到非常滿意。希望我們能讓您更了解我們對未來業務的思考。

Again, have a great day, everyone. Thank you.

再次祝福大家有個愉快的一天。謝謝。

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.

會議現已結束。感謝您參加今天的演講。您可以斷開連線了。