威騰電子 (WDC) 2024 Q1 法說會逐字稿

Good morning, ladies and gentlemen, and welcome to the Western Digital First Quarter Fiscal 2024 Earnings Call. (Operator Instructions) Please also note, today's event is being recorded.

早安，女士們、先生們，歡迎參加西部數據 2024 財年第一季財報電話會議。 （操作員說明）也請注意，今天的活動正在錄製中。

At this time, I'd like to turn the floor over to Peter Andrew, VP of FP&A and Investor Relations. Sir, please go ahead.

現在，我想請 FP&A 和投資者關係副總裁 Peter Andrew 發言。先生，請繼續。

Thank you, and good morning, everyone. Joining me today are David Goeckeler, Chief Executive Officer; and Wissam Jabre, Chief Financial Officer. Before I begin, we have a lot of exciting items to discuss today. In addition to the earnings press release and slides, we also have a press release and slides regarding the conclusion of our strategic review. All of these materials will be posted in the Investor Relations section of our website shortly.

謝謝大家，大家早安。今天與我一起出席的是執行長 David Goeckeler；和首席財務官 Wissam Jabre。在開始之前，我們今天有很多令人興奮的話題要討論。除了收益新聞稿和幻燈片之外，我們還有關於策略審查結論的新聞稿和幻燈片。所有這些資料將很快發佈在我們網站的投資者關係部分。

Let me remind everyone that today's discussion contains forward-looking statements based on management's current assumptions and expectations and, as such, does include risks and uncertainties. These forward-looking statements include expectations for our product portfolio, spending and cost reductions, business plans and performance, market trends, financial results, the outcome of a potential separation of our HDD and flash businesses including the form, timing and tax-free status of the transaction, our ability to complete the transaction, the future performance of our separated businesses and the creation of shareholder value by separating our businesses.

讓我提醒大家，今天的討論包含基於管理層當前假設和預期的前瞻性陳述，因此確實包含風險和不確定性。這些前瞻性陳述包括對我們的產品組合、支出和成本削減、業務計劃和業績、市場趨勢、財務業績、我們的 HDD 和閃存業務潛在分離的結果（包括形式、時間和免稅狀態）的預期交易的情況、我們完成交易的能力、我們分離業務的未來業績以及透過分離我們的業務創造股東價值。

We assume no obligation to update these statements. Please refer to our most recent financial report on Form 10-K and other filings with the SEC for more information on the risks and uncertainties that could cause actual results to differ materially.

我們不承擔更新這些聲明的義務。請參閱我們最新的 10-K 表格財務報告以及向 SEC 提交的其他文件，以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資訊。

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.

今天我們也將提及非公認會計準則財務指標。非公認會計原則和可比較公認會計原則財務指標之間的調節包含在我們網站投資者關係部分發布的新聞稿和其他資料中。

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

現在，我將把電話轉給大衛進行介紹性發言。

Thank you, Peter. Good morning, and thank you for joining our call. I will first discuss the completion of the strategic review and then turn to our first quarter results.

謝謝你，彼得。早安，感謝您加入我們的通話。我將首先討論策略審查的完成情況，然後轉向我們第一季的業績。

We're thrilled to announce the completion of our strategic review and plans to form 2 independent public companies focused on capitalizing on the data storage industry's growth in HDD and flash. After evaluating a comprehensive range of alternatives, the Western Digital management team and Board determined that spinning off its flash business is the best executable alternative at this time to fully realize value for shareholders.

我們很高興地宣布我們的策略審查已完成，並計劃成立兩家獨立的上市公司，專注於利用資料儲存產業在 HDD 和快閃記憶體方面的成長。在評估了一系列全面的替代方案後，西部資料管理團隊和董事會確定，剝離閃存業務是目前為股東充分實現價值的最佳可執行替代方案。

This transaction will allow each franchise to execute on its product and innovation road map and capitalize on the unique growth opportunities in their respective end markets. Each company will benefit from streamline management focus, operational flexibility and the ability to set its own distinct capital allocation and shareholder return policies. We are excited for the opportunities this transaction creates to better serve our customers, support our suppliers, partners and employees and unlock significant value for our shareholders.

此次交易將使每個特許經營商能夠執行其產品和創新路線圖，並利用各自終端市場的獨特成長機會。每家公司都將受益於精簡的管理重點、營運彈性以及製定自己獨特的資本配置和股東回報政策的能力。我們對此次交易創造的機會感到興奮，這些機會可以更好地服務我們的客戶，支持我們的供應商、合作夥伴和員工，並為我們的股東釋放巨大的價值。

Before discussing the details, let me walk you through the journey that brought us to this point. In March 2020, I joined Western Digital with a strong conviction in the company's unique position to accelerate and benefit from the digital transformation that is reshaping every industry, every company and how all of us live our daily lives. And importantly, I saw an opportunity to create value for a leader in both NAND flash and hard drives.

在討論細節之前，讓我先帶您回顧一下我們走到這一步的歷程。 2020 年 3 月，我加入了西部數據，堅信該公司的獨特地位能夠加速數位轉型並從中受益，數位轉型正在重塑每個行業、每個公司以及我們所有人的日常生活方式。重要的是，我看到了為 NAND 快閃記憶體和硬碟領域的領導者創造價值的機會。

During my early days at the company, I spent considerable energy into rebuilding and refocusing the company, including the formation of the HDD and flash business units. It soon became clear that our focus on driving 2 distinct technology portfolios was the right strategy, and the new management team that I brought in worked together to transform Western Digital by bolstering business agility and reinvigorating innovation.

在公司的早期，我花了相當多的精力來重建和重新調整公司的重點，包括組成硬碟和快閃記憶體業務部門。很快我們就發現，我們專注於推動兩種不同的技術組合是正確的策略，我引入的新管理團隊共同努力，透過增強業務敏捷性和重振創新來實現西部數據的轉型。

In addition, we promptly focused on strengthening our balance sheet. We made the tough decision to suspend our dividend, which allowed Western Digital to speed up debt reduction and pay down $2.7 billion of debt over a couple of years following the suspension. We further enhanced our liquidity by bringing in $900 million of strategic investment from Apollo Global Management and Elliott Investment Management and amended our credit agreements. We also settled a long-standing tax dispute to increase strategic optionality.

此外，我們迅速集中精力加強我們的資產負債表。我們做出了暫停派息的艱難決定，這使得西部數據能夠加快債務削減速度，並在暫停派息後的幾年內償還了 27 億美元的債務。我們引進 Apollo Global Management 和 Elliott Investment Management 的 9 億美元策略投資，並修訂了信貸協議，進一步增強了流動性。我們也解決了長期存在的稅務糾紛，以增加策略選擇。

The groundwork we laid over the past several years, including the additional actions taken in fiscal year '23 to rightsize the business, have enabled us to navigate a dynamic environment, all while staying focused on delivering a range of industry-leading products. Each business is now in a strong operational position to succeed on its own, and the actions we are announcing today will further enable each company to drive long-term success in the years to come.

我們在過去幾年中奠定的基礎，包括在 23 財年為調整業務規模而採取的額外行動，使我們能夠應對動態環境，同時專注於提供一系列領先業界的產品。現在，每個企業都處於強大的營運地位，可以自行取得成功，我們今天宣布的行動將進一步幫助每家公司在未來幾年取得長期成功。

The Western Digital team and Board completed the strategic review after evaluating a comprehensive range of alternatives and determined that spinning off its flash business is the best executable alternative at this time to fully realize value for shareholders. During our strategic review process, we evaluated material opportunities for each of our businesses. However, given current constraints, it has become clearer to the Board in recent weeks that delivering a stand-alone separation is the right next step in the evolution of Western Digital and puts the company in the best position to unlock value for our shareholders while providing strategic optionality for both businesses.

西部數據團隊和董事會在評估了一系列全面的替代方案後完成了策略審查，並確定分拆閃存業務是目前為股東充分實現價值的最佳可執行替代方案。在我們的策略審查過程中，我們評估了每項業務的重大機會。然而，考慮到目前的限制，董事會最近幾週變得更加清楚，進行獨立的分離是西部數據發展的正確下一步，並使公司處於為股東釋放價值的最佳位置，同時提供兩家企業的策略選擇。

Given the confidential nature of the strategic review, we will not be discussing any of the other alternatives that were considered during the process. On Page 6 of the presentation, we present a separation transaction summary. The HDD business will retain the Western Digital name and become an independent publicly traded company. The flash business is expected to be spun off in a tax-free transaction to Western Digital shareholders, and the name of the publicly traded company will be determined at a later time. We target to complete these plans in the second half of calendar year '24, subject to the principal closing conditions described in the slide.

鑑於戰略審查的保密性質，我們不會討論在此過程中考慮的任何其他替代方案。在簡報的第 6 頁，我們提供了一份離職交易摘要。硬碟業務將保留西部資料的名稱，並成為獨立的上市公司。閃存業務預計將透過免稅交易剝離給西部數據股東，上市公司的名稱將在稍後確定。我們的目標是在 24 日曆年下半年完成這些計劃，具體取決於幻燈片中描述的主要成交條件。

Page 7 provides a bit more visibility into some of the end market exposure for our flash and HDD businesses on a trailing 12-month basis.

第 7 頁讓我們更深入地了解過去 12 個月我們的快閃記憶體和 HDD 業務的一些終端市場風險。

Moving to the individual businesses on Page 8. In HDD, Western Digital is a well-known leader in the mass storage market with an ability to generate consistent cash flow on a stand-alone basis. Our ability to lead the industry in bringing new innovations to the hard drive market to enable higher capacity points for mass market adoption has established Western Digital as a key strategic supplier to the world's global cloud service providers, storage OEM and distributors.

轉向第 8 頁的個別業務。在 HDD 領域，西部數據是海量儲存市場中眾所周知的領導者，能夠在獨立的基礎上產生持續的現金流。我們能夠引領產業，為硬碟市場帶來新的創新，從而為大眾市場的採用提供更高的容量點，這使西部數據成為全球雲端服務供應商、儲存 OEM 和經銷商的關鍵策略供應商。

The massive opportunity is driven by the ongoing expansion of the cloud infrastructure connected to intelligent endpoints and powered by high-speed networks. Industry analysts estimate the HDD addressable market to grow at approximately 12% compounded annual growth rate to $25 billion over the next 3 years, with cloud representing over 90% of the total addressable market. The cloud represents an incredibly large and growing end market for Western Digital and we are well positioned to address customer storage needs.

連接到智慧端點並由高速網路提供支援的雲端基礎設施的不斷擴展推動了巨大的機會。產業分析師估計，未來 3 年內，HDD 潛在市場將以約 12% 的複合年增長率成長，達到 250 億美元，其中雲端佔整個潛在市場的 90% 以上。對於西部數據來說，雲端代表著一個極其龐大且不斷成長的終端市場，我們有能力滿足客戶的儲存需求。

Moving to our flash business on Page 10. The Western Digital flash business is well known for its broad go-to-market channels, enviable premium brand retail franchise and strong client SSD portfolio. Industry analysts forecast the flash market to grow at approximately 15% compounded annual growth rate over the next 3 years to $89 billion in calendar year 2025. We believe content increases in the consumer and client end markets as well as explosive growth of data created in the cloud by emerging applications such as generative AI, virtual reality and autonomous driving are driving a faster growth in flash versus HDD.

轉向第 10 頁的快閃記憶體業務。西部資料快閃記憶體業務以其廣泛的上市管道、令人羨慕的優質品牌零售特許經營權和強大的客戶端 SSD 產品組合而聞名。產業分析師預測，快閃記憶體市場在未來 3 年將以約 15% 的複合年增長率成長，到 2025 年將達到 890 億美元。我們相信消費者和客戶端市場的內容會增加，並且在生成式人工智慧、虛擬實境和自動駕駛等新興應用程式帶來的雲端運算正在推動快閃記憶體相對於硬碟的更快成長。

The highlight of our consumer end market is the strength of our SanDisk brand of retail products and our suite of high-performance SSDs for gaming enthusiasts. The brand recognition and affinity, combined with our unmatched presence across the world, is a great setup for the business on a stand-alone basis.

我們消費終端市場的亮點是我們閃迪品牌零售產品的實力以及我們為遊戲愛好者提供的高性能固態硬碟套件。品牌知名度和親和力，加上我們在世界各地無與倫比的影響力，對於獨立的業務來說是一個很好的設定。

Our successful 23-year partnership with Kioxia continues to provide us a reliable source of high-performance, low-cost flash. Together, we have successfully brought to market numerous generations of flash technology with the industry's lowest cost and best capital efficiency. The joint venture fabs produce over 30% of the world's bits, and our joint memory technology road map remains incredibly well positioned, especially as we lead the industry's transition to wafer bonding. We will likely host an Investor Day closer to the time of the spin-off of our flash business to give investors greater clarity into the historical and future outlook for each of our businesses, along with the intended capital structures for each business.

我們與 Kioxia 長達 23 年的成功合作關係繼續為我們提供高性能、低成本快閃記憶體的可靠來源。我們共同成功地將多代快閃記憶體技術推向市場，並具有業界最低的成本和最佳的資本效率。合資工廠生產全球 30% 以上的比特，我們的聯合記憶體技術路線圖仍然處於令人難以置信的良好位置，特別是當我們引領產業向晶圓鍵合過渡時。我們可能會在接近快閃記憶體業務分拆時舉辦投資者日活動，讓投資者更清楚地了解我們每項業務的歷史和未來前景，以及每項業務的預期資本結構。

With that, I'd like to turn to first quarter fiscal '24 earnings review and business update. Western Digital's first quarter results exceeded our expectations as the team's efforts to bolster business agility, drive innovation and rightsize the business have enabled us to capitalize on enhanced earning power in an improving environment. We reported first quarter revenue of $2.75 billion and a non-GAAP loss per share of $1.76. Our ability to develop differentiated and innovative products across a broad range of end markets has resulted in sequential margin improvement across both flash and HDD businesses.

說到這裡，我想談談 24 財年第一季的獲利回顧和業務更新。西部數據第一季的業績超出了我們的預期，因為該團隊在增強業務敏捷性、推動創新和調整業務規模方面所做的努力使我們能夠在不斷改善的環境中利用增強的盈利能力。我們報告第一季營收為 27.5 億美元，非 GAAP 每股虧損 1.76 美元。我們在廣泛的終端市場開發差異化創新產品的能力使得快閃記憶體和硬碟業務的利潤率連續提高。

In flash, healthy inventory levels on our balance sheet and signs that flash pricing is beginning to inflect have laid the groundwork for further gross margin improvements. Our broad go-to-market channels' enviable retail franchise and strong client SSD portfolio have enabled us to shift bits to the most attractive end market categories and achieve 26% sequential bit growth as well as upside in gross margin. In HDD, our industry-leading 26-terabyte UltraSMR drive became the highest nearline volume runner in just 2 quarters, which demonstrates Western Digital's aerial density leadership and ability to deliver high-volume innovative technologies to data center customers worldwide.

短期內，我們資產負債表上的健康庫存水準以及短期定價開始變化的跡象，為進一步提高毛利率奠定了基礎。我們廣泛的進入市場通路、令人羨慕的零售特許經營權和強大的客戶端SSD 產品組合使我們能夠將業務轉移到最具吸引力的終端市場類別，並實現26% 的環比增長以及毛利率的上升。在HDD 領域，我們業界領先的26 TB UltraSMR 硬碟在短短兩個季度內就成為近線容量最高的硬碟，這證明了西部資料在空間密度方面的領先地位以及為全球資料中心客戶提供大容量創新技術的能力。

During the quarter, demand in consumer and client continued to improve, exceeding our expectations. In consumer, flash revenue has returned to growth on a year-over-year basis, led by strong content increases and unit growth. In client, PC and component demand also exceeded our expectations, and demand for gaming consoles and mobile remained resilient. In cloud, demand for both hard drive and flash products remain subdued.

本季度，消費者和客戶的需求持續改善，超出了我們的預期。在消費者領域，在內容強勁成長和銷售成長的帶動下，快閃記憶體收入已恢復年成長。在客戶端方面，PC 和組件需求也超出了我們的預期，遊戲機和行動裝置的需求保持彈性。在雲端領域，對硬碟和快閃記憶體產品的需求仍然低迷。

I'll now turn to the business updates, starting with flash. During the quarter, flash revenue increased sequentially led by record exabyte shipments and continued content growth in consumer and client end markets, including PCs and all retail products as we continue to optimize bit placement in an improving environment. WD Black, which is optimized for gaming, continued to perform well with bit shipments more than doubling and content per unit increasing over 50% year-over-year.

我現在將轉向業務更新，從 Flash 開始。本季度，隨著我們在不斷改善的環境中繼續優化位元佈局，創紀錄的艾字節出貨量以及消費者和客戶端市場（包括個人電腦和所有零售產品）的內容持續增長，快閃記憶體收入連續增長。針對遊戲進行優化的 WD Black 繼續表現良好，位元出貨量增加了一倍多，單位內容量同比增長超過 50%。

We are in an excellent position from both the flash technology and capital efficiency perspective. Today, a majority of products we are shipping are based on BiCS5, the most capital-efficient node in the 3D era, that continues to provide an amazing cost structure and efficient capital spending. As we look into calendar year '24, we are ramping an array of QLC-based client SSDs based on BiCS6 technology to lead the expected industry transition to QLC. After BiCS6, we remain on track to introduce a broad range of high-performance products based on BiCS8 technology with its unique chip bonded on array architecture.

從快閃記憶體技術和資本效率的角度來看，我們都處於有利地位。如今，我們發貨的大多數產品都基於 BiCS5，這是 3D 時代資本效率最高的節點，它繼續提供令人驚嘆的成本結構和高效的資本支出。展望 24 日曆年，我們正在推出一系列基於 BiCS6 技術的 QLC 用戶端 SSD，以引領預期的產業向 QLC 的過渡。 BiCS6 之後，我們將繼續推出基於 BiCS8 技術及其獨特的晶片黏合陣列架構的各種高性能產品。

Turning to HDD. Revenue declined due to lower nearline exabyte shipments driven by subdued demand from our cloud customers and slower-than-expected recovery in China. However, demand for consumer and client hard drives was stable. Western Digital has continued to lead the industry in driving innovation within the nearline market. Our ability to bring innovation into mass market drives that are quickly deployed into cloud data centers is reflected in our results as we successfully led the industry's transition to SMR-based nearline drives.

轉向硬碟。由於雲端客戶需求疲軟以及中國復甦速度慢於預期，導致近艾位元組出貨量下降，導致營收下降。然而，消費者和客戶端硬碟的需求穩定。西部數據在推動近線市場創新方面繼續引領產業。我們將創新引入大眾市場驅動器並快速部署到雲端資料中心的能力反映在我們的業績中，因為我們成功引領了業界向基於 SMR 的近線驅動器的過渡。

Specifically, our 26-terabyte UltraSMR drive, which we first announced at our Investor Day, accounted for nearly half of our nearline exabyte shipments with total SMR shipments exceeding the 40% goal we laid out in the same quarter a year prior. We are on track with our 28-terabyte UltraSMR drive qualification and have a clear road map of ePMR and UltraSMR-based innovations into the 40-terabyte range. These developments are a result of the choices we have made in the past few years through a combination of product R&D and manufacturing capabilities, and we are proud of how we have been executing against our strategy.

具體來說，我們在投資者日首次宣布的 26 TB UltraSMR 驅動器占我們近 EB 出貨量的近一半，SMR 總出貨量超過了我們在去年同一季度製定的 40% 目標。我們正在順利獲得 28 TB UltraSMR 硬碟資格，並制定了將 ePMR 和基於 UltraSMR 的創新擴展到 40 TB 範圍的清晰路線圖。這些發展是我們在過去幾年中透過產品研發和製造能力相結合做出的選擇的結果，我們對我們如何執行我們的策略感到自豪。

Looking ahead to the fiscal second quarter. In flash, we expect both modest bit and ASP improvement and a decline in underutilization charges to drive continued sequential improvement in both revenue and gross margin. In HDD, we expect higher nearline shipments and seasonal demand in consumer end market to drive sequential revenue growth. We anticipate our value-based price efforts and lower underutilization charges will lead to sequential revenue and gross margin improvement in the quarter and through the rest of fiscal year '24. As we continue to execute against our HDD product road map, we are setting the stage for profitable growth for years to come.

展望第二財季。在快閃記憶體方面，我們預計位元和平均售價的適度改善以及未充分利用費用的下降將推動收入和毛利率的持續環比改善。在硬碟方面，我們預期消費者終端市場的近線出貨量增加和季節性需求將推動營收季增。我們預計，我們基於價值的價格努力和較低的未充分利用費用將導致本季和 24 財年剩餘時間的收入和毛利率連續改善。隨著我們繼續執行硬碟產品路線圖，我們正在為未來幾年的獲利成長奠定基礎。

With that, I'll turn it over to Wissam.

有了這個，我會把它交給維薩姆。

Thank you, and good morning, everyone. As David mentioned, fiscal first quarter results exceeded the guidance ranges provided in July. Total revenue for the quarter was $2.75 billion, up 3% sequentially and down 26% year-over-year. Non-GAAP loss per share was $1.76.

謝謝大家，大家早安。正如 David 所提到的，第一財季業績超出了 7 月提供的指導範圍。該季度總營收為 27.5 億美元，季增 3%，年減 26%。非 GAAP 每股虧損為 1.76 美元。

Looking at end markets for the fiscal first quarter. Cloud represented 32% of total revenue at $0.9 billion, down 12% sequentially and 52% year-over-year. Sequentially, the decline was primarily due to lower nearline hard drive shipments to data center customers. The year-over-year decrease was primarily due to declines in shipments for both hard drive and flash products.

著眼於第一財季的終端市場。雲端收入為 9 億美元，佔總營收的 32%，季減 12%，年減 52%。其次，下降的主要原因是向資料中心客戶的近線硬碟出貨量減少。年比下降的主要原因是硬碟和快閃記憶體產品的出貨量下降。

Clients represented 42% of total revenue at $1.1 billion, up 11% sequentially and down 7% year-over-year. Sequentially, the increase was due to growth in flash bit shipments. The year-over-year decrease was primarily due to declines in flash pricing. Consumer represented 26% of revenue at $0.7 billion, up 14% sequentially and $0.08 year-over-year. On both a sequential and year-over-year basis, the increase was driven by both higher content per unit and increased unit shipments in flash.

客戶營收為 11 億美元，佔總營收的 42%，季增 11%，年減 7%。其次，成長是由於快閃記憶體位出貨量的成長。年比下降主要是由於快閃記憶體價格下降。消費者業務佔營收的 26%，達 7 億美元，季增 14%，年增 0.08 美元。無論是環比還是同比，這一增長都是由單位內容量增加和閃存單位出貨量增加所推動的。

Turning now to revenue by segment. In the fiscal first quarter, flash revenue was $1.6 billion, up 13% sequentially and down 10% year-over-year. This marks the second consecutive quarter of sequential increase. Sequentially, flash ASPs decreased 10% on a blended basis and 4% on a like-for-like basis. We shipped a record amount of flash bits in the quarter with shipments increasing 26% sequentially and 49% year-over-year.

現在轉向按細分市場劃分的收入。第一財季，快閃記憶體營收為 16 億美元，季增 13%，年減 10%。這標誌著連續第二個季度環比增長。隨後，快閃記憶體平均售價在混合基礎上下降了 10%，在同比基礎上下降了 4%。本季我們的快閃記憶體位出貨量創歷史新高，出貨量較上季成長 26%，較去年同期成長 49%。

HDD revenue was $1.2 billion, down 8% sequentially and 41% year-over-year. Sequentially, total HDD exabyte shipments decreased 5% and average price per unit increased 13% to $112. On a year-over-year basis, total HDD exabyte shipments decreased 42% and average price per unit decreased 10%.

HDD 營收為 12 億美元，季減 8%，年減 41%。隨後，HDD EB 總出貨量下降了 5%，每單位平均價格上漲 13% 至 112 美元。與去年同期相比，HDD 艾位元組總出貨量下降了 42%，單位平均價格下降了 10%。

Moving to gross margin and expenses. Please note that my comments will be related to non-GAAP results unless stated otherwise. Gross margin for the first quarter was 4.1%, which was at the higher end of the guidance range provided in July and included $225 million in underutilization expenses and $9 million in other onetime charges. In total, these charges represented an 8.5 percentage point headwind to gross margin.

轉向毛利率和費用。請注意，除非另有說明，我的評論將與非公認會計準則結果相關。第一季的毛利率為 4.1%，處於 7 月提供的指導範圍的較高端，其中包括 2.25 億美元的未充分利用費用和 900 萬美元的其他一次性費用。總的來說，這些費用使毛利率下降了 8.5 個百分點。

Flash gross margin was negative 10.3%. Underutilization charges due to reduced manufacturing volumes were $142 million and flash inventory write-downs were $9 million, resulting in a combined 9.7 percentage points headwind to gross margin. HDD gross margin was 22.9%. Underutilization charges were higher than expected at $83 million or a 7 percentage point headwind to gross margin.

快閃記憶體毛利率為負10.3%。由於產量減少而產生的利用率不足費用為 1.42 億美元，庫存減記為 900 萬美元，導致毛利率總計下降 9.7 個百分點。硬碟毛利率為22.9%。未充分利用費用高於預期，為 8,300 萬美元，比毛利率低 7 個百分點。

We continue to tightly manage our operating expenses, which were down 19% year-over-year to $555 million, well below our guidance range. Operating loss was $443 million, which included underutilization charges and inventory write-downs totaling $234 million. Income tax expense in the fiscal first quarter was $25 million. Net loss per share was $1.76, inclusive of a $15 million dividend associated with the convertible preferred equity.

我們繼續嚴格管理營運支出，年減 19% 至 5.55 億美元，遠低於我們的指導範圍。營運虧損為 4.43 億美元，其中包括總計 2.34 億美元的未充分利用費用和庫存減記。第一財季的所得稅費用為2500萬美元。每股淨虧損為 1.76 美元，其中包括與可轉換優先股相關的 1,500 萬美元股息。

Operating cash flow for the first quarter was an outflow of $626 million, and free cash flow was an outflow of $544 million. Free cash flow included a payment of $523 million for the IRS settlement and $191 million cash received from the sale and leaseback of our facility in Milpitas, California.

第一季營運現金流流出 6.26 億美元，自由現金流流出 5.44 億美元。自由現金流包括支付 IRS 和解金 5.23 億美元，以及從我們位於加州米爾皮塔斯工廠的出售和回租中收到的 1.91 億美元現金。

Inventory declined $201 million sequentially to $3.5 billion. Days of inventory declined 10 days to 120 days. Flash inventory declined by nearly $400 million, driven by record bit shipments in the quarter and proactive actions taken to reduce wafer starts. Days of inventory for flash have reached the lowest level in nearly 4 years. HDD inventory grew by nearly $200 million due to the timing of certain purchases and lower-than-expected shipments.

庫存季減 2.01 億美元，至 35 億美元。庫存天數下降 10 天至 120 天。由於本季創紀錄的位出貨量以及採取積極措施減少晶圓開工，快閃庫存下降了近 4 億美元。快閃記憶體庫存天數已達到近四年來的最低水準。由於某些採購的時間表和出貨量低於預期，HDD 庫存增加了近 2 億美元。

Cash capital expenditures, which include the purchase and sale of property, plant and equipment, including the proceeds from our sale leaseback of our Milpitas facility and activity related to our flash joint ventures on the cash flow statement, represented a net cash inflow of $82 million. In the fiscal first quarter, we fully drew the $600 million delayed drought term loan facility. Gross debt outstanding was $7.7 billion at the end of the fiscal quarter. At the end of the quarter, total liquidity was $4.3 billion, including cash and cash equivalents of $2 billion and undrawn revolver capacity of $2.25 billion.

現金資本支出，包括購買和出售財產、廠房和設備，包括我們對米爾皮塔斯設施的售後回租收益以及現金流量表中與我們的閃存合資企業相關的活動的收益，淨現金流入為8200 萬美元。在第一財季，我們全額提取了 6 億美元的延遲乾旱定期貸款融資。截至本財季末，未償債務總額為 77 億美元。截至本季末，流動性總額為 43 億美元，其中現金及現金等價物 20 億美元，未動用左輪手槍容量 22.5 億美元。

Before I cover guidance for the fiscal second quarter, I'll discuss the business outlook. For fiscal second quarter, we expect total revenue growth to be led by higher nearline HDD shipments and improved pricing in flash. We continue to adjust production into the second quarter to better align supply with demand and anticipate lower underutilization charges in both flash and HDD.

在介紹第二財季的指導之前，我將討論業務前景。對於第二財季，我們預計總營收成長將由近線 HDD 出貨量增加和快閃記憶體定價改善帶動。我們將繼續調整第二季的產量，以更好地調整供應與需求，並預期快閃記憶體和 HDD 的未充分利用費用將會降低。

For our fiscal second quarter, our non-GAAP guidance is as follows. We expect revenue to be in the range of $2.85 billion to $3.05 billion. We expect gross margin to be between 10% and 12%, which includes underutilization charges across flash and HDD totaling $110 million to $130 million. We expect operating expenses to be between $560 million and $580 million. Interest and other expenses are expected to be approximately $105 million. We expect income tax expenses to be between $20 million and $30 million for fiscal second quarter and $80 million to $120 million for fiscal year 2024. We expect a preferred dividend of $15 million. We expect the loss per share of $1.35 to $1.05, assuming approximately 325 million shares outstanding.

對於我們的第二財季，我們的非公認會計準則指引如下。我們預計營收將在 28.5 億美元至 30.5 億美元之間。我們預計毛利率將在 10% 至 12% 之間，其中包括快閃記憶體和 HDD 總計 1.1 億至 1.3 億美元的未充分利用費用。我們預計營運費用將在 5.6 億美元至 5.8 億美元之間。利息和其他費用預計約為 1.05 億美元。我們預計第二財季的所得稅費用將在 2,000 萬至 3,000 萬美元之間，2024 財年的所得稅費用將在 8,000 萬至 1.2 億美元之間。我們預計優先股股息為 1,500 萬美元。假設流通股數量約為 3.25 億股，我們預期每股虧損為 1.35 美元至 1.05 美元。

I'll now turn the call back over to David.

我現在將把電話轉回給大衛。

Thanks, Wissam. Let me wrap up and then we'll open up for questions.

謝謝，維薩姆。讓我總結一下，然後我們將開始提問。

We are now emerging from a historic storage cyclical downturn, where all of the changes made in the past several years were evident in how well each business performed relative to peers. The first quarter of fiscal '24 builds upon the improvements we made in fiscal year '23 around disciplined supply and capital expenditure management while executing on our product innovation road map. We continue to tightly manage our operating expenses and are closely monitoring demand in our end markets to appropriately manage our inventory in both flash and HDD, all to improve sequential and year-over-year upside in our results.

我們現在正在擺脫歷史性的儲存週期性低迷，過去幾年所做的所有變化都體現在每項業務相對於同業的表現如何。 24 財年第一季的基礎是我們在執行產品創新路線圖時圍繞嚴格的供應和資本支出管理在 23 財年所做的改進。我們繼續嚴格管理我們的營運費用，並密切關注終端市場的需求，以適當管理我們的快閃記憶體和硬碟庫存，所有這些都是為了提高我們業績的環比和同比增長。

Moving forward, as we progress through fiscal year '24, we see an improving market environment in both businesses. With an improved position, the separation of the company unlocks value by creating 2 independent public companies with market-specific strategic focus, better positions each franchise to execute innovative technology and product development, capitalize on unique growth opportunities, extend respective leadership positions and operate more efficiently with distinct capital structures.

展望未來，隨著我們在 24 財年的進展，我們看到這兩項業務的市場環境正在改善。隨著地位的提高，公司的分立透過創建兩家具有特定市場策略重點的獨立上市公司來釋放價值，更好地定位每個特許經營權來執行創新技術和產品開發，利用獨特的成長機會，擴大各自的領導地位並運作更多高效且具有獨特的資本結構。

Okay, Peter. Let's open up for Q&A.

好吧，彼得。讓我們開始問答。

(Operator Instructions) And our first question today comes from Joe Moore from Morgan Stanley.

（操作員說明）今天我們的第一個問題來自摩根士丹利的喬摩爾。

Congratulations on the decision here. Can you talk through a little bit anything preliminary in terms of how the OpEx might be apportioned between the 2 businesses? And you mentioned maybe you'll go to the capital structure at a later date, but just anything early on like what you think the right amount of debt is to apportion of the 2 businesses.

在這裡恭喜你的決定。您能否簡單談談營運支出如何在這兩家企業之間分配的問題？你提到也許你會在稍後討論資本結構，但只是早期的任何事情，例如你認為正確的債務金額是兩家公司的分配。

Joe, thanks for the question. Look, it's a little bit too premature to talk about details with respect to each side of the business or each company. As we get closer to the separation, we'll be in a better position to talk about much more details with respect to OpEx apportionment as well as capital structures, leverage targets and capital return policies, et cetera.

喬，謝謝你的提問。聽著，現在談論業務各方或每家公司的細節還為時過早。隨著分離的臨近，我們將能夠更好地討論有關營運支出分配以及資本結構、槓桿目標和資本回報政策等的更多細節。

Joe, this is David. Thanks for the question. One thing I will say is we're very happy with the level of efficiency we've driven into the business over the last year, especially during this downturn, and we think has put us in a very good position to go through this transaction. I think OpEx over 2 years is down -- over the last 2 years is down over $200 million. So we put ourselves in a position where we've got a very efficient business and some flexibility to go through a transaction like this. So as Wissam said, we'll have more to say as we get closer.

喬，這是大衛。謝謝你的提問。我要說的一件事是，我們對去年業務的效率水平感到非常滿意，尤其是在經濟低迷時期，我們認為這使我們處於非常有利的位置來完成這項交易。我認為營運支出在過去 2 年裡下降了——在過去 2 年裡下降了 2 億多美元。因此，我們的業務非常高效，並且具有一定的靈活性來完成這樣的交易。正如維薩姆所說，隨著時間的推移，我們將有更多話要說。

Okay. And then I wonder if I could just ask more tactically in terms of the need to pay down the convert early next year and how you're thinking about that and whether this the strategic change here changes anything in terms of your ability to do conversions or things like that to pay that down?

好的。然後我想知道我是否可以從戰術上問一下是否需要在明年初支付轉換費用以及您如何考慮這一點，以及這裡的戰略變化是否會改變您進行轉換的能力或諸如此類的事情要付清嗎？

Yes, Joe, the current announcement does not affect our ability to address the convert. As we've said before, our plan is to address the convert that's maturing in Feb '24 by the end of this calendar year.

是的，喬，目前的公告不會影響我們解決皈依者問題的能力。正如我們之前所說，我們的計劃是在本日曆年年底之前解決 24 年 2 月到期的轉換問題。

Next question comes from Aaron Rakers from Wells Fargo.

下一個問題來自富國銀行的 Aaron Rakers。

Two, if I can as well, real quick. I guess the first question is just thinking about the separation. Appreciating that you're not going to give anything at this point around the capital structure. I'm just curious, though, the relationship with Kioxia. I know in the past there's been certain attributes of rights as part of the JV. Any kind of context about the dialogue moving to the separation as it relates to the JV rights? Or should we be thinking about any approval processes that are involved in that?

第二，如果我也可以的話，很快。我想第一個問題只是考慮分離。感謝您目前不會就資本結構提供任何資訊。不過，我只是好奇與 Kioxia 的關係。我知道過去作為合資企業的一部分，存在著某些權利屬性。由於涉及合資企業權利，對話轉向分拆有什麼背景嗎？或者我們應該考慮其中涉及的任何審批流程？

No. I mean -- so first off, the relationship with Kioxia is outstanding and it has been for a very, very long time. So we expect that to continue on, absolutely. It provides a tremendous foundation for our NAND business with both very capital-efficient NAND and a tremendous road map as we're going into BiCS8 here. But we can execute this transaction without any other approvals.

不，我的意思是 - 首先，與 Kioxia 的關係非常出色，而且已經持續了非常非常長的時間。所以我們預計這種情況絕對會持續下去。它為我們的 NAND 業務奠定了堅實的基礎，既具有資本效率極高的 NAND，也為我們即將進入 BiCS8 提供了龐大的路線圖。但我們可以在沒有任何其他批准的情況下執行這筆交易。

Okay. And then as a quick follow-up, I'm just curious on the hard disk drive business. I know the cloud revenue in total was down consistently again quarter-over-quarter. Just how would you characterize what you're seeing from a nearline perspective from the cloud? Have you started to see demand pull again? Just any kind of context of how you're thinking about the shaping of kind of a recovery here as we move forward.

好的。作為快速跟進，我只是對硬碟業務感到好奇。我知道雲端總收入再次逐季持續下降。您如何描述從雲端的近線角度所看到的內容？您是否再次開始看到需求拉動？隨著我們前進，您如何考慮塑造復甦的任何背景。

Yes. We think this past quarter was the bottom, Aaron. And we see improving demand as we move throughout the fiscal year on a quarter-over-quarter basis. We've had certain customers that have been on the sidelines for a while and they're starting to come back and give us visibility into ordering. So we expect the market to recover from here going forward.

是的。我們認為上個季度是谷底，亞倫。隨著整個財年季度環比的變化，我們看到需求正在改善。我們有一些客戶已經觀望了一段時間，他們開始回來讓我們了解訂購情況。因此，我們預計市場未來將從這裡復甦。

Our next question comes from Krish Sankar from TD Cowen.

我們的下一個問題來自 TD Cowen 的 Krish Sankar。

I had 2 of them, too. First one, again, sorry to harp on the separation. It makes a lot of sense. I'm just kind of curious, in the past, David, you've spoken about some of the synergies in R&D and how the HDD product line uses some of the BOM from OptiNAND et cetera. I'm just kind of curious, would that change post the separation? Or there's going to be no strategic shift on that? And then I have a follow-up.

我也有 2 個。第一個，再一次，抱歉，我一直在談論分離。這很有道理。我只是有點好奇，David，過去您曾談到研發方面的一些協同效應，以及 HDD 產品線如何使用 OptiNAND 等的一些 BOM。我只是有點好奇，分手後這種情況會改變嗎？或不會有任何戰略轉變？然後我有一個後續行動。

So there's no -- the separation doesn't imply any change in strategy for either business. So both of them will continue to go forward. No change in our product road map. We feel very good about what's been built over the last 3, 4 years. We feel like we're in a market-leading position in both franchises both from a product point of view. If you look at what's happened in the hard drive business. It's very, very clear now the adoption of SMR is the next big step in the cloud data center, and that's progressing very well.

因此，分離並不意味著兩家公司的策略會發生任何變化。所以兩人都會繼續前進。我們的產品路線圖沒有改變。我們對過去三、四年的建設感到非常滿意。我們覺得從產品的角度來看，我們在這兩個特許經營權中都處於市場領先地位。如果你看看硬碟產業發生的事情。現在非常非常清楚，SMR 的採用是雲端資料中心的下一個重大步驟，而且進展非常順利。

Our [26-T] drive just became the highest shipping drive in the quarter, and we announced the next generation of that with the [28-T] as well. So no change there. OptiNAND is still a big part of that architecture, and the team will be able to procure that and continue to drive that part of the strategy. And on the flash side of the business, the portfolio is also in great shape with -- both from a product strategy and also the branding strategy, SanDisk, WD Black, these brands continue to perform extremely well. So we think it's a great setup for both businesses going forward.

我們的 [26-T] 驅動器剛剛成為本季出貨量最高的驅動器，我們也宣布了下一代 [28-T] 驅動器。所以那裡沒有變化。 OptiNAND 仍然是該架構的重要組成部分，團隊將能夠採購它並繼續推動該策略的這一部分。在快閃記憶體業務方面，產品組合也狀況良好，無論是從產品策略或品牌策略來看，SanDisk、WD Black 這些品牌的表現仍然非常出色。因此，我們認為這對兩家企業的未來發展都是一個很好的安排。

Got it. And then a quick follow-up. Your peers spoke about the HAMR technology getting like adopted next year. And your road map does ePMR to extending to 32-plus terabyte. I'm kind of curious how you think about HAMR and your road map in case that catch up with [C8].

知道了。然後快速跟進。您的同行談到了 HAMR 技術將於明年被採用。您的路線圖將 ePMR 擴展到 32 TB 以上。我有點好奇你如何看待 HAMR 以及你的路線圖，以防你趕上 [C8]。

Look, we put a lot of optionality in our road map a number of years ago so that we could extend the capacity points with like OptiNAND, SMR, UltraSMR, ePMR. So that strategy is working very, very well. We're leading the industry and capacity points. We expect to be able to drive this strategy into the 40-terabyte range on our drives. HAMR is in development. It's going well, and we'll be able to fold that into our road map at the appropriate time.

看，我們幾年前在路線圖中加入了很多選項，以便我們可以使用 OptiNAND、SMR、UltraSMR、ePMR 等擴展容量點。所以這個策略非常非常有效。我們在產業和產能方面處於領先地位。我們希望能夠將此策略在我們的硬碟上推向 40 TB 的範圍。 HAMR 正在開發中。進展順利，我們將能夠在適當的時候將其納入我們的路線圖。

But for now, we've got a great road map. We've got a market-leading road map. We're leading the adoption of SMR into the cloud data center. And we expect -- we have many more generations to go on our current road map, and then we'll move to HAMR at the appropriate time when it's mature and we can build it at scale. It will be the next leg of growth into the future.

但目前，我們已經有了一個很好的路線圖。我們擁有市場領先的路線圖。我們正在引領雲端資料中心採用 SMR。我們預計，我們目前的路線圖還需要更多世代的努力，然後我們將在 HAMR 成熟並且可以大規模建造它的適當時候轉向它。這將是未來的下一個成長階段。

Our next question comes from Wamsi Mohan from Bank of America.

我們的下一個問題來自美國銀行的瓦姆西·莫漢 (Wamsi Mohan)。

Back to the transaction, I guess. Can you maybe talk a little bit about all the actions that you have taken that might be preventing some of the dissynergies that typically occur in terms of stranded costs when there is separation of the business? Can you maybe, a, address that?

我想，回到交易。您能否談談您所採取的所有行動，這些行動可能會防止業務分離時通常在擱淺成本方面出現的一些不協同效應？你能解決這個問題嗎？

And b, on your comments on the road map, UltraSMR, ePMR, you have a lot of options you've noted scaling up to 40 TB. Can you just talk about what the cost of that, how that would compare to your own future HAMR road map and give us some sense of how cost competitive you think these products would be?

b，根據您對路線圖、UltraSMR、ePMR 的評論，您注意到有很多選項可以擴展到 40 TB。您能否談談其成本是多少，與您未來的 HAMR 路線圖相比如何，並讓我們了解您認為這些產品的成本競爭力如何？

Okay. So on the first one, yes, I mean, Wamsi, I think you kind of laid it out there. We've been going through a whole series of actions that have set us up for this announcement. It was really about execute the business better and give ourselves as much strategic optionality as possible. So as I talked about in the prepared remarks, we separated ourselves into business units on the product side. That allows us to really get very focused on the portfolio and all the OpEx we spend on building our products, make sure we get the best return for it. I think that's worked out well. We then did the same thing in operations. We've now divided those organizations around HDD and flash.

好的。所以關於第一個，是的，我的意思是，Wamsi，我認為你已經把它擺在那裡了。我們已經採取了一系列行動，為這項聲明做好了準備。這實際上是為了更好地執行業務並為我們自己提供盡可能多的策略選擇。正如我在準備好的發言中談到的，我們將自己劃分為產品方面的業務部門。這使我們能夠真正專注於產品組合以及我們用於建立產品的所有營運支出，確保我們獲得最佳回報。我認為效果很好。然後我們在營運中做了同樣的事情。現在，我們已將這些組織劃分為 HDD 和快閃記憶體。

So we've -- and then we've optimized taken out costs everywhere we can so that we can operate them independently and also have just the most efficient business possible. As I said, we focused on our balance sheet. So I think we've put ourselves in a very good position where we can go through this separation and the organization is as prepared as we possibly can be for it. We've also -- as I said earlier, we've taken a lot of OpEx out of the business. So we've driven the OpEx down to a very efficient number. So we believe we can go through the separation and end up with 2 very well structured companies that can execute very well, and they come out of the gate with market-leading portfolios on each side and into a recovering market. So we feel good about that.

因此，我們已經盡可能地優化了成本，這樣我們就可以獨立運作它們，並盡可能獲得最高效的業務。正如我所說，我們關注的是我們的資產負債表。因此，我認為我們已經處於一個非常有利的位置，我們可以度過這次分離，並且組織已經做好了盡可能的準備。正如我之前所說，我們也從業務中削減了大量營運支出。因此，我們已將營運支出降低到非常有效率的數字。因此，我們相信，我們可以完成分拆，最終得到兩家結構良好、執行出色的公司，當它們走出大門時，雙方都擁有市場領先的投資組合，並進入復甦的市場。所以我們對此感覺良好。

Cost of the portfolio, look, I mean, as we continue -- we feel the road map we have in place, we can produce UltraSMR, ePMR, OptiNAND drives very high scale, very quickly, very high yields on all the products. So we think the cost position is very advantageous. You see that in our results. So when HAMR comes, we'll fold that in, and we want to get to the point where we have the same level of yields. We have same level of confidence as we do, something like 26-T drive that we just launched and now it's nearly half of our exabytes a quarter or 2 in. And that's how we think about launching new products.

投資組合的成本，看，我的意思是，隨著我們繼續 - 我們感覺到我們已經制定了路線圖，我們可以生產 UltraSMR、ePMR、OptiNAND 驅動器，所有產品的產量非常高、非常快、非常高。所以我們認為成本地位非常有利。您在我們的結果中看到了這一點。因此，當 HAMR 到來時，我們會將其納入其中，我們希望達到相同的收益率水平。我們和我們一樣有同樣的信心，例如我們剛剛推出的 26-T 驅動器，現在四分之一或 2 英寸的艾字節容量接近一半。這就是我們對推出新產品的看法。

So when we get there, I think that we'll have that same kind of cost structure on HAMR, and we have a great -- very, very strong position to drive very efficient, very high scale, very quickly new drives for many generations on the technology that we put in place over the last 3 or 4 years.

因此，當我們到達那裡時，我認為我們將在 HAMR 上擁有相同的成本結構，並且我們擁有非常非常強大的地位來推動非常高效、非常大規模、非常快速的多代新驅動器我們在過去3 或4 年裡採用的技術。

Our next question comes from Sydney Ho from Deutsche Bank.

我們的下一個問題來自德意志銀行的 Sydney Ho。

Congrats on the announcement today. Understanding you have amended that debt covenants back in June, given the announced transaction, how are you thinking about the covenants over the next few quarters, specifically related to free cash flow before the transaction is closed? And does that limit the amount of CapEx that you could spend in the meantime? And I have a follow-up.

祝賀今天的宣布。鑑於您已在 6 月修改了債務契約，考慮到已宣布的交易，您如何看待未來幾季的契約，特別是與交易結束前的自由現金流相關的契約？這是否會限制您同時可以花費的資本支出金額？我有一個後續行動。

Sidney, thanks for the question. The current announcement does not affect the amended credit agreement. And so from a free cash flow, from a covenants perspective, we're comfortable that we can operate effectively. We have ample liquidity. We do have ample operational flexibility to operate. So I don't see the current announcement as impacting us in any way.

西德尼，謝謝你的提問。目前公告不影響修訂後的信貸協議。因此，從自由現金流來看，從契約的角度來看，我們對自己能有效運作感到滿意。我們有充足的流動性。我們確實有足夠的營運彈性。因此，我認為目前的公告不會對我們產生任​​何影響。

Okay. My follow-up is, if you look at the fiscal second quarter guidance, if you can walk us through your assumptions that drive 7 points of increase in gross margin, that will be great. It looks like your underutilization charges coming down. Are there benefits from sales of previously down inventory? And what are you expecting in terms of price increases in both flash and hard disk drive on a like-for-like basis?

好的。我的後續行動是，如果你看看第二財季的指導，如果你能向我們介紹你的假設，推動毛利率成長 7 個百分點，那就太好了。您的未充分利用費用似乎有所下降。銷售之前的庫存是否有好處？您對快閃記憶體和硬碟的價格上漲有何預期？

Okay. Maybe I'll start a little bit on the cost side and then David could chime in on the top line side. Look, the -- one of the bigger obviously levers is the underutilization. We did in Q1 around $225 million. In total, we had around $234 million to $235 million of other charges. And our guide has aimed underutilization at a much lower level. And so that's one element.

好的。也許我會從成本方面開始，然後大衛可以在頂線方面插話。看，最大的槓桿之一顯然是利用率不足。我們第一季的營收約為 2.25 億美元。總共，我們有大約 2.34 億至 2.35 億美元的其他費用。我們的指南將未充分利用的目標定在低得多的水平。這就是其中一個要素。

In addition, obviously, we continue to focus on cost reduction. We do have still -- we're still -- if you exclude the underutilization aspect, we're still taking cost out of the system on both the flash side and the HDD side. And so that's a key lever to improve the gross margin. And then if I take it back up to the top line, we see obviously improvement on the revenue side, and the improvement is coming from both sides of the house on both businesses. So that also contributes quite well with respect to the gross margin. And within that revenue, also, we do have a bit of a mix that's helping us as well.

此外，顯然我們繼續關注降低成本。我們確實仍然——我們仍然——如果排除利用率不足的方面，我們仍然在閃存端和硬碟端降低系統的成本。因此，這是提高毛利率的關鍵槓桿。然後，如果我把它回到頂線，我們會看到收入方面明顯有所改善，而這種改善來自於兩家公司的兩方面。因此，這對毛利率也有很大貢獻。在這些收入中，我們確實也有一些對我們有幫助的組合。

Yes. Sidney, I guess what I would add is if you look at the HDD business, we're ramping new products, right? The 28 -- 26-T drive is ramping rapidly. And we also have an improving price environment, pricing environment in drives, which is a nice tailwind. And then in flash, we have an improving pricing environment as well, as Wissam said, a better mix. And we expect that business to inflect a positive gross margin next quarter, which is a great milestone for us as we continue the recovery of the business.

是的。 Sidney，我想我要補充的是，如果你看看硬碟業務，我們正在推出新產品，對嗎？ 28 - 26-T 驅動器正在迅速發展。我們還有一個不斷改善的價格環境，驅動器的定價環境，這是一個很好的推動力。然後，正如維薩姆所說，我們也有一個不斷改善的定價環境，一個更好的組合。我們預計該業務下季將實現正毛利率，這對我們繼續恢復業務來說是一個重要的里程碑。

Our next question comes from Tom O'Malley from Barclays.

我們的下一個問題來自巴克萊銀行的湯姆·奧馬利。

I just wanted to ask on your expectations for both market, demand on the NAND exabyte side for fiscal year '24 as well as your view of supply. I mean, you're starting the year up almost 50% year-over-year, obviously, off a very low base and sequentially up mid-20s. Some of your peers have talked about really strong demand here to begin the fiscal year or to begin the recovery in those -- for those other guys. But kind of some slowing as guys saw the bottom, ordered a bunch and have kind of slowed down. Can you just give me your comments on if you're seeing any of that and then your expectations for the exabyte shipments for you for the fiscal year?

我只是想問一下您對 24 財年 NAND EB 市場的預期、需求以及您對供應的看法。我的意思是，今年年初，您將同比增長近 50%，顯然是在非常低的基數基礎上，然後連續增長了 20 多歲。你們的一些同行已經談到，對於其他人來說，開始本財年或開始復甦的需求非常強勁。但隨著人們看到底部，訂購了一堆並且放慢了速度，速度有所放緩。您能否就您是否看到上述情況以及您對本財年艾字節出貨量的預期發表評論？

Yes. So we did -- we have seen an acceleration here at the end of '23. We've raised our demand number quite a bit into the low mid-teens for '23. We'll get to '24. Some of that, there has been some strategic buys as part of that, I know that's been a big discussion in the industry. But we also just see the markets returning to normal inventory levels. So for us, that's been more of what's been happening and a good mix across the businesses. For '24, we see high teens kind of demand, and we continue to see production significantly below that.

是的。所以我們做到了——我們在 23 年底看到了這裡的加速。我們已將 23 年的需求數字大幅提高到十幾歲以下。我們將到'24。其中有一些是策略性收購的一部分，我知道這在業界引起了很大的討論。但我們也只是看到市場恢復到正常庫存水準。所以對我們來說，這更多的是正在發生的事情以及跨業務的良好組合。對於 24 年，我們看到了十幾歲的需求，但我們仍然看到產量明顯低於該水平。

Helpful. And then on the other side of the business, you talked about the kind of varied inventory positions. You have flash going down, HDD actually going up a bit. And if you compare your results with Seagate, at least for the last couple of quarters, results have been relatively similar. Could you just talk about when we should start to see that divergence just given the fact that you're addressing a higher capacity point in the market today? And theoretically, you should see some outsized benefit. When do you think you'll start to see that divergence in the market?

有幫助。然後在業務的另一邊，您談到了各種庫存狀況。快閃記憶體效能下降，硬碟效能實際上上升了一點。如果你將你的結果與希捷進行比較，至少在過去幾個季度，結果相對相似。鑑於您今天正在解決市場上更高的容量點，您能否談談我們什麼時候應該開始看到這種差異？從理論上講，您應該會看到一些巨大的好處。您認為什麼時候您會開始看到市場的這種差異？

Divergence in what aspects, Tom?

湯姆，分歧在哪些方面？

In terms of revenue difference.

從收入差異來看。

So we're managing the business for profitability on HDD. I mean, I think it's -- we -- and I think we are driving a more profitable business. So that's the way we think about the business and driving back to our model, which we expect to get back to here over the next several quarters.

因此，我們正在管理硬碟業務以實現盈利。我的意思是，我認為我們正在推動一項利潤更高的業務。這就是我們思考業務並回到我們的模型的方式，我們預計將在接下來的幾個季度回到這裡。

Our next question comes from Srini Pajjuri from Raymond James.

我們的下一個問題來自 Raymond James 的 Srini Pajjuri。

David, on the HDD comments that you see growth throughout the fiscal year, just looking for some additional color. Just kind of listening to some of your customers and the big hyperscalers, I think the CapEx comments have been fairly mixed. And I'm just curious as to how broad-based this recovery that you're seeing is? Is it primarily driven by the inventory workdowns or anything else that's driving it? And also, if you can comment on by geography, I think you said China was weak in the quarter. If you could talk about how -- what's your expectation for China business is, going forward.

David，關於 HDD 的評論，您看到整個財年的成長，只是尋找一些額外的色彩。只是聽了一些客戶和大型超大規模企業的意見，我認為資本支出的評論相當複雜。我只是好奇你所看到的這種復甦的基礎有多廣泛？它主要是由庫存縮減還是其他推動因素所驅動的？另外，如果您可以按地理位置進行評論，我認為您說中國在本季度表現疲軟。如果您能談談您對中國業務未來的期望是什麼。

Yes, I think you got it there in your question. I think you have more broad-based participation in the market by the big hyperscalers as they get to the end of their inventory corrections. So that's been part of it. Remember, we're coming off a very, very, very low numbers. So we expect improvement throughout the year by more people participating in the market and more consistent participation by the ones that have been in it on a quarter-over-quarter basis.

是的，我想你已經在你的問題中得到了答案。我認為，當大型超大規模企業的庫存調整結束時，他們會更廣泛地參與市場。這就是其中的一部分。請記住，我們的數字非常非常低。因此，我們預計全年會有更多的人參與市場，並且每季參與市場的人都會更一致地參與。

China has been -- it's been better but not -- it hasn't recovered as fast as we expected. So it's still a little bit lumpy and weaker than we would like. So the smart video market has been pretty consistent, and we've seen some good results there. But in the cloud space, it still has a little ways to go.

中國一直——情況有所好轉，但並沒有——恢復得沒有我們預期的那麼快。所以它仍然比我們想要的要弱一些。因此，智慧視訊市場一直相當穩定，我們已經看到了一些不錯的結果。但在雲端領域，它還有很長的路要走。

And then a cash flow question for Wissam. I guess I'm just curious, you had an IRS payment due during the quarter. Did you make the payment? I see like a $300 million impact from the tax. And then if you could walk us through some of the puts and takes in terms of free cash flow for next quarter, I think that will be helpful.

然後是維薩姆的現金流問題。我想我只是好奇，您在本季度有一筆到期的國稅局付款。你付款了嗎？我預計該稅收將產生 3 億美元的影響。然後，如果您可以向我們介紹下季度自由現金流方面的一些看跌期權和看跌期權，我認為這會有所幫助。

Yes, sure. So on the tax payment in Q1, we made a $523 million payment with respect to the IRS settlement. This covers the years 2008 through 2012. And so this is why you see, when you look at our free cash flow that we reported for fiscal Q1 at a negative $544 million in that we had that $523 million payment on the -- it was partially offset by the sale leaseback of the Milpitas facilities of around $191 million. So all in all, there were around the negative $200 million for the quarter.

是的，當然。因此，在第一季的納稅方面，我們向 IRS 和解支付了 5.23 億美元。這涵蓋了 2008 年到 2012 年。這就是為什麼當你查看我們第一財季報告的自由現金流為負 5.44 億美元時，你會發現，我們支付的 5.23 億美元部分是米爾皮塔斯設施的售後回租抵消了約1.91 億美元的影響。總而言之，本季的虧損額約為 2 億美元。

As we look forward, obviously, the key is the continuous improvement of the profitability of the business, working capital management. You've seen our transition on the inventory side, for instance, in Q1. We continue to manage inventory very, very closely on both flash and HDD. So I expect that inventory to continue to decline gradually in this coming quarter and the next.

展望未來，顯然關鍵在於業務獲利能力、營運資金管理的持續改善。例如，您已經在第一季看到了我們在庫存方面的轉變。我們繼續非常非常密切地管理快閃記憶體和硬碟的庫存。因此，我預計庫存將在本季和下一季繼續逐漸下降。

And then the continued focus on CapEx for the fiscal year, we did say that for fiscal '24, we expect our cash CapEx to be significantly lower than fiscal 2023. So free cash flow is -- and cash flow is very important to us, a big focus, and we will continue to focus on it. And as we look into the second half of fiscal '24, we're projecting to be cash flow positive on a quarterly basis in the second half of this fiscal year.

然後繼續關注本財年的資本支出，我們確實說過，對於 24 財年，我們預計我們的現金資本支出將顯著低於 2023 財年。因此，自由現金流對我們來說非常重要，一個大焦點，我們將繼續關注它。當我們展望 24 財年下半年時，我們預期本財年下半年的季度現金流量將為正值。

Our next question comes from Karl Ackerman from BNP Paribas.

我們的下一個問題來自法國巴黎銀行的卡爾·阿克曼。

When do you anticipate NAND underutilization charges to abate? And then second, you indicated that NAND and HDD bit shipments will recover in December. I guess for NAND, will that be primarily tied to consumer applications? Or do you expect enterprise to be the larger driver over the next couple of quarters?

您預計 NAND 未充分利用的費用何時會減少？其次，您表示 NAND 和 HDD 位元出貨量將在 12 月恢復。我想對於 NAND 來說，這將主要與消費應用相關嗎？或者您預期企業將成為未來幾季的更大推動力？

Yes, I'll take the second part of that and Wissam can comment on the underutilization charges. Look, we expect bits to be up slightly in the December quarter. It's a strong consumer quarter for us, although we don't really break out by mix. But I mean, I think that's one way to think about it. We expect an improving price environment and bits to be slightly up.

是的，我將討論第二部分，維薩姆可以對未充分利用費用發表評論。看，我們預計 12 月季度的比特幣價格將小幅上漲。對我們來說，這是一個強勁的消費季度，儘管我們並沒有真正透過混合來突破。但我的意思是，我認為這是思考這個問題的一種方式。我們預計價格環境將有所改善，比特幣價格將小幅上漲。

Yes. And with respect to underutilization, Karl, we do manage our supply very dynamically. And so we guided this quarter based on what we see today, we do expect underutilization to continue in the third fiscal quarter, maybe a little bit lower than here. But it's a bit too early to cover the quarters beyond the next one.

是的。關於利用率不足的問題，卡爾，我們確實非常動態地管理我們的供應。因此，我們根據今天所看到的情況對本季度進行了指導，我們確實預計第三財季利用率將繼續不足，可能會比此時低一點。但現在討論下一個季度之後的情況還為時過早。

Our next question comes from Vijay Rakesh from Mizuho. Actually, the next question comes from Timothy Arcuri from UBS.

我們的下一個問題來自 Mizuho 的 Vijay Rakesh。實際上，下一個問題來自瑞銀集團的提摩西‧阿庫裡。

David, at the bottom of Slide 4, you did say that the Board remains open to considering other alternatives should they become available. So since you put that in the presentation. Can you talk about what other options could be available? Is this a reference to the collapse of the JV that [Hynix] commented about or was asked about on its call? Is this in reference to an outright sale of the NAND business? Can you just talk about that a little more?

David，在幻燈片 4 的底部，您確實說過，如果有其他替代方案可用，董事會仍願意考慮其他替代方案。既然你把它放在簡報中了。您能談談還有哪些其他選擇嗎？這是指 [Hynix] 在電話會議中評論或被問及的合資企業倒閉嗎？這是指直接出售 NAND 業務嗎？能再多談一下嗎？

No, it's not in reference to any particular thing. It just says that we think this is the best next step for the business to unlock value. We think that we put the business in a position to go through this right now, so all the reasons we talked about from the portfolio to where we are on an efficiency point of view to where we are on the work we've done to retire debt and also going into an improving market. But I think any company is always open to other strategic options should

不，這不是指任何特定的事物。它只是表明我們認為這是企業釋放價值的最佳下一步。我們認為我們現在讓業務能夠經歷這個過程，所以我們討論的所有原因，從投資組合到我們從效率角度到我們為退休所做的工作的情況債務並進入不斷改善的市場。但我認為任何公司都應該始終對其他策略選擇持開放態度

they become available, and we'll consider them at that time. Although I do want to be very clear that the strategic review is completed, and any conversations that were going on as a part of that have ended. And we're very excited about this step forward. We think it's the best next step for the business. But I think in any business, you're always going to be open. If there's other strategic options that become available, we will thoroughly consider those at the time.

它們可供使用，屆時我們將考慮它們。儘管我確實想非常明確地表明，戰略審查已經完成，並且作為其中一部分正在進行的任何對話都已經結束。我們對這一步的進展感到非常興奮。我們認為這對企業來說是最好的下一步。但我認為在任何行業，你總是必須保持開放的態度。如果還有其他可用的策略選擇，我們將在當時進行徹底考慮。

Got it. And then, Wissam, for you. So the underutilization charges of $120 million at the midpoint, how do they split for December? I would think that more of it is now in the HDD business. But how does that split?

知道了。然後，維薩姆，為你。那麼，中間 1.2 億美元的未充分利用費用，在 12 月如何分配？我認為現在更多的是硬碟業務。但這是如何分裂的呢？

Yes. The split of the underutilization is 2/3 flash and 1/3 HDD.

是的。未充分利用的部分是 2/3 快閃記憶體和 1/3 HDD。

And our next question does come from Vijay Rakesh from Mizuho.

我們的下一個問題確實來自 Mizuho 的 Vijay Rakesh。

Just a quick question, if you went to it already. When you look at the hard disk drive side, wondering if you had -- what the exabyte growth was for the last 2 years and what you're seeing as you look forward with this? Seems like a little bit of a bounce coming through. What do you expect for fiscal '24, fiscal '25 or -- calendar '24, let's say. Yes.

只是一個簡單的問題，如果你已經看過的話。當您查看硬碟方面時，想知道過去 2 年的 EB 增長是多少，以及您對此有何期待？似乎有一點反彈。比方說，您對 24 財年、25 財年或 24 財年有何期望？是的。

So yes, we -- I mean, coming off such a high on '22, '23 will be down. But then we expect to get back to -- we expect a consistent exabyte growth in this business in the mid- to high 20% range on an ongoing basis.

所以，是的，我們 - 我的意思是，從 22 年的高點回落，23 年將會下跌。但隨後我們預計，我們預計該業務將持續以 20% 的中高比例持續成長。

Got it. And the same on the NAND side. With the spin-off, do you see any change in the technology road map? How do you see the [218], the next generation bits coming? And if you can also give us your [expectation] on NAND bit growth for '23 and '24.

知道了。 NAND 方面也是如此。隨著分拆，您認為技術路線圖有什麼改變嗎？您如何看待下一代位元的到來[218]？如果您也可以告訴我們您對 23 年和 24 年 NAND 位元成長的[預期]。

Yes. No, we don't expect any change in the technology road map. The JV is very strong, very solid, very productive. Teams work together on a day-by-day basis. We've talked a lot about that. We're very happy where it's at. The relationship is very strong. The technology road map, we think, as we talked about last time with BiCS8 and wafer bonding, we've made a huge step forward there.

是的。不，我們預計技術路線圖不會有任何變化。該合資企業非常強大、非常穩固、非常有成效。團隊每天一起工作。我們已經就此談了很多。我們對它所處的位置感到非常高興。這種關係非常牢固。我們認為，正如我們上次談到的 BiCS8 和晶圓鍵合技術路線圖，我們已經向前邁出了一大步。

We've always been able to produce NAND at a better capital intensity than the rest of the industry. Our measures over the last several years are up to 1/3 less capital intensity for the business. So the JV has been strong for 23-plus years, and we expect it to be strong for very, very far into the future. So we feel very good about that.

我們一直能夠以比行業其他公司更好的資本密集度生產 NAND。過去幾年我們採取的措施將企業的資本密集度降低了 1/3。因此，這家合資企業已經強勁發展了 23 年多，我們預計它在未來很長一段時間內也將保持強勁。所以我們對此感覺非常好。

Got it. And any thought around the bit growth, I guess, for '24 and -- as the next generation -- as the next big stage starts to ramp, I guess.

知道了。我想，關於 24 年位元成長的任何想法，以及——作為下一代——隨著下一個大階段的開始，我想。

Yes. We expect demand in '24 in the NAND business to be high teens. And if it gets really strong, maybe it will creep over the 20s, in the low 20s, but we're thinking about those high-teens numbers. And like I said, production will be significantly below that.

是的。我們預計 24 年 NAND 業務的需求將達到十幾歲。如果它變得非常強勁，也許它會蔓延到 20 多歲、20 多歲以下，但我們正在考慮那些高十幾歲的數字。正如我所說，產量將大大低於這個水平。

Our next question comes from Harlan Sur from JPMorgan.

我們的下一個問題來自摩根大通的 Harlan Sur。

Congratulations on the strategic actions announced today.

祝賀今天宣布的策略行動。

Thank you.

謝謝。

On the flash technology side, the JV brings strong synergies in flash manufacturing development and manufacturing scale. Excluding the underutilization charges, you guys have been driving down the underlying cost per bit at around a mid-teens type CAGR and in line with your prior targets, and that's even with the rising capital intensity, right? As you look ahead,BiCS6 transition, move to bonded architecture on BICS8, does the team believe that can sustain its mid-teens cost on profile?

在快閃記憶體技術方面，合資公司在快閃記憶體製造開發和製造規模方面帶來了強大的協同效應。排除未充分利用的費用，你們一直在以大約十幾歲的複合年增長率降低每比特的基本成本，並與你們之前的目標保持一致，即使資本密集度不斷上升，對吧？展望未來，BiCS6 過渡，轉向 BICS8 上的綁定架構，團隊是否認為這可以維持其十幾歲左右的成本？

Yes, we do. We feel very good about that. I mean, I've spoken about this in the past. It's an explicit goal of the technology team to continue to drive those cost downs, and we feel good about our ability to do that. It's been one of the strengths of the JV and the JV technology team for a very long time.

是的，我們願意。我們對此感覺非常好。我的意思是，我過去曾談過這個問題。技術團隊的明確目標是繼續推動成本下降，我們對我們做到這一點的能力感到滿意。長期以來，這一直是合資公司和合資公司技術團隊的優勢之一。

And then on the flash portfolio side, within SSD particularly, the team has been in a very, very strong #2 market share position. In client SSD, very strong portfolio. In enterprise and cloud, however, you've been consistently in the sort of #5, #6 global market share position. So as you think about spinning out the flash business, what is the team doing to improve its competitiveness in its enterprise and cloud SSD portfolio?

然後在快閃記憶體產品組合方面，特別是在 SSD 領域，該團隊一直處於非常非常強勁的第二市場份額位置。在客戶端SSD方面，有非常強大的產品組合。然而，在企業和雲端領域，您一直處於全球市場份額第五、第六的位置。那麼，當您考慮分拆快閃記憶體業務時，團隊正在採取哪些措施來提高其企業和雲端 SSD 產品組合的競爭力？

Well, we like the portfolio we have. We qualified our NVMe-based enterprise SSD at multiple cloud providers. And unfortunately, we qualified right into a significant downturn in cloud consumption of enterprise SSDs. So as that starts to come back over the next several quarters and as we go through '24, we expect our position to improve as we -- as those vendors start consuming again. I mean, the reality is there's just not a lot of buying in that market going on right now.

嗯，我們喜歡我們擁有的投資組合。我們在多個雲端供應商驗證了基於 NVMe 的企業級 SSD。不幸的是，我們正好遭遇了企業級 SSD 雲端消費的大幅下滑。因此，隨著這種情況在接下來的幾個季度開始恢復，並且隨著我們進入 24 年，隨著這些供應商再次開始消費，我們預計我們的地位將會改善。我的意思是，現實情況是，目前該市場上的購買量並不多。

Our next question comes from Mehdi Hosseini from SIG.

我們的下一個問題來自 SIG 的 Mehdi Hosseini。

David, I just want to go back to your comment you just made regarding enterprise SSD. When I look at the slides from the results of a strategic review, you're highlighting strength in client SSD and also retail. But, I don't see any mention of enterprise SSD. How should I reconcile that with the comments you just made?

David，我只想回到您剛才關於企業級 SSD 的評論。當我查看策略審查結果的幻燈片時，您強調了客戶端 SSD 和零售方面的優勢。但是，我沒有看到任何提及企業級 SSD 的內容。我應該如何將其與您剛剛發表的評論進行協調？

Well, I mean, it's because those are 2 very, very strong strengths of the portfolio. I think they're very unique. Look, our retail franchise is a real gem. I mean, it's a big part of the portfolio. It provides better through-cycle profitability. We've done a lot of work on building brands over the last several years. I mean, we've already had very, very strong brands in SanDisk. I mean, I think everybody knows SanDisk is a premier brand in the industry.

嗯，我的意思是，這是因為這是該投資組合的兩個非常非常強大的優勢。我認為它們非常獨特。看，我們的零售特許經營權是一顆真正的寶石。我的意思是，它是投資組合的重要組成部分。它提供了更好的整個週期盈利能力。過去幾年，我們在打造品牌方面做了大量工作。我的意思是，我們已經擁有非常非常強大的 SanDisk 品牌。我的意思是，我想每個人都知道 SanDisk 是業界首屈一指的品牌。

We've built the Black brand around gaming now. That's a significant part of the portfolio. I think we're the preferred provider in gaming. We talked about it this quarter, where 50% year-over-year content increases in devices and doubling the number of bits in that. So it's been -- it's a very, very key part of the portfolio. We look forward to highlighting it more. The client portfolio has always been a strength of the business. It's something that's been built over the last several years. We've driven several innovations in that, like the DRAM-less client SSD. That's always been a very strong part of the portfolio.

我們現在已經圍繞著遊戲打造了 Black 品牌。這是投資組合的重要組成部分。我認為我們是遊戲領域的首選提供者。我們在本季討論過這個問題，設備中的內容年增了 50%，位數也增加了一倍。所以它一直是投資組合中非常非常關鍵的部分。我們期待更多地強調它。客戶群一直是我們業務的優勢。這是過去幾年建造的東西。我們在這方面推動了多項創新，例如無 DRAM 用戶端 SSD。這一直是產品組合中非常重要的一部分。

I guess, Mehdi, we could have put a whole bunch of stuff on the slide that we're proud of in the portfolio but we picked the strongest ones. But we're very bullish on the enterprise SSD market. It's just a market that's depressed right now. We talked a lot about that last year. We had qualifications at multiple hyperscalers. Those products are still active. We're migrating them forward to future nodes, and we expect those to ramp as that market recovers.

我想，Mehdi，我們本可以在幻燈片上放一大堆我們引以為傲的東西，但我們選擇了最強大的東西。但我們非常看好企業級SSD市場。這只是一個目前低迷的市場。去年我們對此談了很多。我們擁有多個超大規模企業的資格。這些產品仍然活躍。我們正在將它們遷移到未來的節點，我們預計隨著市場的復甦，這些數量將會增加。

Okay. Great. And just a question -- a follow-up question for Wissam, and I'm not asking you for guide on 2024. But if I just look at your cost decline, if I just assume 10% bit cost decline and assume a current ASP trend, your NAND or flash business should become profitable maybe by midyear or sooner than later. The trajectory is very supportive of reaching profitability in the next couple of quarters. Is that a fair assumption?

好的。偉大的。這只是一個問題——Wissam 的後續問題，我不是要你提供 2024 年的指南。但是如果我只看你的成本下降，如果我假設 10% 的比特成本下降並假設當前的 ASP按照趨勢，你的NAND 或快閃記憶體業務可能會在年中或更早之前獲利。這一軌跡非常有利於在未來幾季實現盈利。這是一個公平的假設嗎？

Well, look, what -- in the current guide for this quarter, it does imply that NAND should be gross margin positive. And in terms of the outer quarters, it's a little bit too early for us to comment on them.

好吧，看，在本季度當前的指南中，它確實暗示 NAND 的毛利率應該為正。至於外部區域，我們現在評論還為時過早。

And our final question today comes from Toshiya Hari from Goldman Sachs.

今天我們的最後一個問題來自高盛的 Toshiya Hari。

Congrats on the announcement.

恭喜您宣布這項消息。

Thanks, Toshiya.

謝謝，俊哉。

So on the NAND side, I think, based on a response to a prior question, it looks like you're assuming underutilization charges declined by about $60 million from September to December. Are you guys taking up wafers (inaudible)? What's driving the sequential decline in charges in NAND?

因此，在 NAND 方面，我認為，根據先前問題的回答，您似乎假設從 9 月到 12 月，未充分利用費用下降了約 6000 萬美元。你們在拿晶圓嗎（聽不清楚）？是什麼導致 NAND 電荷連續下降？

Yes. I guess what I -- Wissam will comment a little bit as well. But I guess what I would say, Toshiya, is we're not putting a broad statement out there about that. What we're doing is just being very dynamic with how we manage wafer starts so that we can keep supply and demand matched as best we can without letting inventory get up too high.

是的。我想我——Wissam 也會發表一些評論。但我想我想說的是，Toshiya，我們不會就此發表廣泛的聲明。我們正在做的只是在管理晶圓開工的方式上保持動態，以便我們能夠盡可能保持供需匹配，而不會讓庫存過高。

So as you saw, I mean, our NAND inventory is at the best level since I've been here in the company. I mean, Wissam's team has done a great -- and the operations team just done an unbelievable job of managing that. So we'll stay very close to where our markets are and how we're seeing demand, and then we'll adjust wafer [starts] appropriately.

正如您所看到的，我的意思是，我們的 NAND 庫存處於我加入公司以來的最佳水平。我的意思是，Wissam 的團隊做得很好，而營運團隊在管理方面也做了令人難以置信的工作。因此，我們將非常接近我們的市場狀況以及我們對需求的看法，然後我們將適當調整晶圓[開始]。

Yes. Thanks, Dave. The only thing I would add, Toshiya, is that when you think of underutilization, just -- I know there was an earlier question on this. Yes, we do expect underutilization further in the second half of the fiscal year. The way to think of it is we were expecting underutilization to be slightly lower from these levels in the third fiscal quarter. And as David said, this is very dynamic. We continue to manage the business on a day-to-day, week-to-week basis. And so obviously, depending on business conditions, this could still change.

是的。謝謝，戴夫。 Toshiya，我唯一要補充的是，當你想到利用率不足時，我知道之前有一個關於此的問題。是的，我們確實預期本財年下半年利用率將進一步不足。思考的方式是，我們預期第三財季的利用率不足會略低於這些水準。正如大衛所說，這是非常動態的。我們繼續每天、每週管理業務。顯然，根據業務條件，這種情況仍然可能會改變。

Yes, that's very helpful. And then as a quick follow-up, David, you talked about value-based pricing on the hard disk drive side and how that's driving better gross margins into the December quarter. Can you speak to any kind of specific end markets where you're seeing traction? Is it mostly client and consumer? Are you able to push through some price rises in the cloud segment as well?

是的，這非常有幫助。然後，作為快速跟進，David，您談到了硬碟方面基於價值的定價，以及這如何推動 12 月季度的毛利率提高。您能談談您認為具有吸引力的任何特定終端市場嗎？主要是客戶和消費者嗎？您是否也能夠推動雲端領域的一些價格上漲？

I think it's -- so first of all, in the channel, we're seeing good response to value-based pricing. And then as we bring out new products, as I said in the past, I think innovation is what the first part of value-based pricing is bringing a better value proposition to our customers. And as we continue to bring out unique products, 26-terabyte UltraSMR ramped very fast. Nearly half of our nearline exabytes this quarter. And we're now bringing out 28. And I think as we continue to do that, we'll have the opportunity to have a better conversation with our customers because we're bringing more value to them. So I would say it's -- we're looking at it across all of our markets.

我認為，首先，在通路中，我們看到對基於價值的定價的良好反應。然後，當我們推出新產品時，正如我過去所說，我認為創新是基於價值的定價的第一部分，為我們的客戶帶來更好的價值主張。隨著我們不斷推出獨特的產品，26 TB UltraSMR 的成長速度非常快。本季近線艾位元組的近一半。我們現在推出了 28 個產品。我認為，隨著我們繼續這樣做，我們將有機會與客戶進行更好的對話，因為我們正在為他們帶來更多價值。所以我想說的是——我們正在所有市場上關注它。

All right. Thank you, Toshiya, appreciate that. Everybody, we appreciate the time today. Thanks for the discussion, and we look forward to talking to you as we progress throughout the quarter.

好的。謝謝你，Toshiya，非常感謝。各位，我們很珍惜今天的時光。感謝您的討論，我們期待在整個季度的進展中與您交談。

And ladies and gentlemen, with that, we'll conclude today's conference call. We thank you for joining. You may now disconnect your lines.

女士們、先生們，我們今天的電話會議就到此結束。我們感謝您的加入。現在您可以斷開線路。