威騰電子 (WDC) 2024 Q3 法說會逐字稿

Good afternoon, everyone, and thank you for standing by. Welcome to Western Digital's Third Quarter Fiscal 2024 Conference Call. (Operator Instructions) As a reminder, this event is being recorded.

大家下午好，謝謝大家的支持。歡迎參加西部數據 2024 財年第三季電話會議。 （操作員說明）謹此提醒，正在記錄此事件。

Now I will turn the call over to Mr. Peter Andrew, Vice President Financial Planning and Analysis and Investor Relations. You may begin.

現在我將把電話轉給財務規劃和分析以及投資者關係副總裁彼得安德魯先生。你可以開始了。

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

謝謝大家，大家下午好。今天與我一起出席的是執行長 David Goeckeler；和首席財務官 Wissam Jabre。

Before we begin, let me remind everyone that today's discussion contains forward-looking statements based upon management's current assumptions and expectations, and as such, does include risks and uncertainties. These forward-looking statements include expectations for our product portfolio, our business plan and performance, the separation of our Flash and HDD businesses, ongoing market trends and our future financial results. We assume no obligation to update these statements. Please refer to our most recent financial report on Form 10-K and our other filings with the SEC for more information on the risks and uncertainties and that could cause actual results to differ materially from expectations.

在開始之前，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、業務計劃和業績、快閃記憶體和硬碟業務的分離、持續的市場趨勢以及我們未來的財務表現的預期。我們不承擔更新這些聲明的義務。請參閱我們最新的 10-K 表格財務報告以及我們向 SEC 提交的其他文件，以了解有關可能導致實際結果與預期存在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'll now turn the call over to David.

這樣，我現在將把電話轉給大衛。

Thank you, Peter. Good afternoon, everyone, and thanks for joining the call to discuss our third quarter of fiscal year 2024 performance.

謝謝你，彼得。大家下午好，感謝您參加電話會議，討論我們 2024 財年第三季的業績。

Western Digital delivered excellent results in the quarter with revenue of $3.5 billion non-GAAP gross margin of 29.3% and non-GAAP earnings per share of $0.63, all of which exceeded expectations. Our strategy of developing a diversified portfolio of industry-leading products across a broad range of end markets, coupled with structural changes we have made to both of our businesses is unlocking our true earnings potential and allowing us to continue improving through-cycle profitability and dampening business cycles. This strategy enables us to generate higher earnings per share even in a constrained supply environment.

西部數據本季業績出色，營收為 35 億美元，非 GAAP 毛利率為 29.3%，非 GAAP 每股收益為 0.63 美元，均超出預期。我們在廣泛的終端市場上開發行業領先產品的多元化投資組合的策略，加上我們對兩項業務所做的結構性變革，正在釋放我們真正的盈利潛力，並使我們能夠繼續提高整個週期的獲利能力並抑製商業週期。這項策略使我們即使在供應緊張的環境下也能產生更高的每股盈餘。

In addition, our commitment to achieving operational efficiency and enhancing our agility has allowed us to run our Flash and HDD businesses more efficiently and further drive innovation to take opportunities. In particular, as the technology landscape continues to evolve, the demand for AI solutions is becoming increasingly apparent across our end markets. The uptick in AI adoption is highlighting the incredible value of data and will drive increased storage demand across both HDD and Flash at the edge and in the core, providing greater long-term growth and margin expansion opportunities for Western Digital.

此外，我們對實現營運效率和增強敏捷性的承諾使我們能夠更有效地經營快閃記憶體和硬碟業務，並進一步推動創新以抓住機會。特別是，隨著技術格局的不斷發展，我們的終端市場對人工智慧解決方案的需求變得越來越明顯。人工智慧採用率的上升凸顯了數據令人難以置信的價值，並將推動邊緣和核心的 HDD 和快閃記憶體儲存需求的增加，為西部數據提供更大的長期成長和利潤擴張機會。

We are in the early innings of unlocking the full potential of this company, and our team remains focused on improving the profitability of our business to drive long-term margin expansion and shareholder value as these new demand opportunities present themselves.

我們正處於釋放該公司全部潛力的早期階段，隨著這些新的需求機會的出現，我們的團隊仍然專注於提高業務的獲利能力，以推動長期利潤率擴張和股東價值。

Before I dive further into the demand environment, I want to briefly comment on the status of the separation of our Flash and HDD businesses. I am proud of the team's ongoing efforts as we drive towards completion of the separation in the second half of the calendar year. We remain focused on achieving the separation as soon as possible, and we'll continue to provide further updates on our progress as appropriate.

在進一步探討需求環境之前，我想先簡單評論一下我們快閃記憶體和硬碟業務分離的狀況。我為團隊持續不斷的努力感到自豪，因為我們正努力在今年下半年完成分離工作。我們仍然致力於盡快實現分離，並將繼續酌情提供有關進展的進一步更新。

Moving on to end market commentary. I am pleased to report that during the quarter, revenue in all of our major end markets returned to year-over-year growth. In cloud, we experienced 29% growth in revenue from a year ago, highlighting the incredible success of our industry-leading HDD product line. In addition, we began to experience an increase in demand for our flash-based solutions, signaling a long-awaited recovery in this end market. In client, 20% revenue growth from a year ago was driven by increased bit demand for our flash-based solutions, coupled with an increase in ASPs.

接下來是終端市場評論。我很高興地報告，本季我們所有主要終端市場的收入恢復了同比增長。在雲端領域，我們的營收比一年前成長了 29%，凸顯了我們業界領先的 HDD 產品線取得的令人難以置信的成功。此外，我們開始感受到對基於快閃記憶體的解決方案的需求增加，這標誌著該終端市場期待已久的復甦。在客戶端，我們基於快閃記憶體的解決方案的位元需求增加以及 ASP 的成長推動了營收比一年前成長了 20%。

In consumer, we experienced 17% revenue growth from a year ago, highlighting the power of the SanDisk premium brand. Higher flash bit sales, combined with a better pricing environment more than offset the continued decline in consumer HDD demand.

在消費領域，我們的營收比一年前成長了 17%，凸顯了 SanDisk 高端品牌的力量。更高的快閃記憶體位銷售量，加上更好的定價環境，足以抵消消費者 HDD 需求的持續下降。

I'll now turn to business updates, starting with flash. Our sequential revenue growth in the quarter reflects the continuing commitment to disciplined capital spending and carefully optimizing bit shipments into our most profitable end markets to take advantage of the improved pricing environment. This approach, combined with the strength of our product portfolio has enabled us to drive significantly higher profitability while strategically managing our inventory.

我現在將轉向業務更新，從 Flash 開始。我們本季收入的環比增長反映了我們對嚴格資本支出的持續承諾，並仔細優化我們利潤最高的終端市場的比特出貨量，以利用改善的定價環境。這種方法與我們產品組合的優勢相結合，使我們能夠在策略性管理庫存的同時顯著提高盈利能力。

On the technology front, we achieved a significant milestone by initiating mass production of our QLC-based client SSD, leveraging BiCS6 technology. This is yet another significant milestone demonstrating our continued commitment to innovation and market leadership. These advancements pave the way to spearhead the market's transition to QLC-based flash solutions in calendar year 2024. Additionally, our progress with BiCS8 is on track. While this technology is ready to be productized as market conditions warrant, our innovative offerings will remain at the forefront of the market, further strengthening our competitive position and bolstering our growth prospects.

在技​​術方面，我們利用 BiCS6 技術開始大量生產基於 QLC 的客戶端 SSD，實現了一個重要的里程碑。這是另一個重要的里程碑，顯示我們對創新和市場領導地位的持續承諾。這些進步為 2024 年引領市場向基於 QLC 的快閃記憶體解決方案過渡鋪平了道路。雖然這項技術已準備好根據市場條件進行產品化，但我們的創新產品將保持在市場的前沿，進一步加強我們的競爭地位並增強我們的成長前景。

As noted earlier, in the third quarter, we began to experience an increase in demand for our enterprise SSD solutions. We are seeing demand returning for NVMe SSDs that we qualified before the downturn. We are also experiencing significant interest in providing these products in dramatically higher capacities for AI-related applications, which we expect to ship in the second half of the year. In addition, we are also sampling our newest high-performance PCI Gen 5, BiCS6-based enterprise SSD. We are preparing for qualification at a hyperscaler and the product is generating significant interest in the enterprise market. We expect to ramp in the second half of the calendar year.

如前所述，在第三季度，我們的企業級 SSD 解決方案的需求開始增加。我們看到對經濟衰退前我們合格的 NVMe SSD 的需求有所回升。我們也對這些為人工智慧相關應用提供容量大幅提高的產品表現出濃厚的興趣，預計將在今年下半年出貨。此外，我們還提供了基於 BiCS6 的最新高性能 PCI Gen 5 企業級 SSD 樣品。我們正在準備獲得超大規模的資格認證，該產品正在企業市場中產生巨大的興趣。我們預計將在今年下半年實現成長。

Turning to HDD. The sequential revenue increase was driven by improved nearline demand and higher pricing as we focused on optimizing profitability per exabyte sold. In particular, nearline revenue reached a fixed quarter high, reflecting the successful strategy we put in place to bring the most innovative, high-capacity and high-performance drives to market. We have the right products at the right cost structure, which are reflected in our financial performance.

轉向硬碟。營收季增是由於近線需求改善和定價上漲所推動的，因為我們專注於優化每艾位元組銷售的獲利能力。特別是，近線收入達到了固定的季度高點，反映出我們為將最具創新性、高容量和高效能的硬碟推向市場而製定的成功策略。我們以正確的成本結構提供正確的產品，這反映在我們的財務表現中。

Our cloud customers continue to transition to SMR with our 26-terabyte and 28-terabyte UltraSMR drives, quickly becoming a significant portion of our capacity enterprise exabyte shipments. SMR-based drives represented approximately 50% of nearline exabyte shipments in the quarter. Our portfolio strategy to commercialize ePMR, OptiNAND and UltraSMR technologies in advance of our transition to HAMR, has proven to be the winning strategy and enables us to deliver to customers the industry's highest capacity and leading TCO drives, all of which can be produced at scale with controlled costs. We are confident that our product strategy, which combines UltraSMR technology with upcoming advancements in nearline drives is enabling Western Digital to deliver best-in-class gross margin in HDDs all at a time when AI is emerging as another growth engine for the industry.

我們的雲端客戶繼續使用我們的 26 TB 和 28 TB UltraSMR 硬碟過渡到 SMR，迅速成為我們容量企業 EB 出貨量的重要組成部分。基於 SMR 的驅動器約佔本季近 EB 出貨量的 50%。我們在向 HAMR 過渡之前將 ePMR、OptiNAND 和 UltraSMR 技術商業化的投資組合策略已被證明是一種制勝策略，使我們能夠向客戶提供業界最高容量和領先的 TCO 驅動器，所有這些都可以大規模生產並控制成本。我們相信，我們的產品策略將 UltraSMR 技術與即將到來的近線驅動器進步相結合，使西部數據能夠在人工智慧正在成為該行業另一個成長引擎的同時，在硬碟領域提供一流的毛利率。

As we move toward a new supply and demand environment, characterized by higher demand, supply tightness and product shortages, we are leveraging our proven technology we've already introduced to the market to meet the demands of our customers with the right portfolio at the right time, while also operating with a lean cost structure for continued profitability improvement in our HDD business. Although the actions we are taking have improved profitability, we remain focused on driving higher margins to appropriately value the incredible amount of innovation and TCO improvements we continue to deliver to our customers.

隨著我們走向新的供需環境，其特點是需求增加、供應緊張和產品短缺，我們正在利用我們已經引入市場的成熟技術，透過正確的產品組合來滿足客戶的需求時間，同時也以精益成本結構運營，以持續提高硬碟業務的獲利能力。儘管我們正在採取的行動提高了盈利能力，但我們仍然專注於提高利潤率，以適當重視我們繼續為客戶提供的大量創新和 TCO 改進。

Before I turn it over to Wissam, I wanted to share some perspectives on our outlook. Within Flash, in addition to growth opportunities at the edge, which is Western Digital strength, we are encouraged by the returning demand within the enterprise SSD market and expect growth throughout this calendar year. AI-related workloads are driving increasing demand for enterprise SSDs, and our portfolio is well positioned to support those use cases. Looking ahead, we anticipate bit shipments to remain flat into the fiscal fourth quarter and look to flash ASP increases to be the primary revenue growth driver, led by our focus on allocating bits to the most high-value end markets amidst the tightening supply environment.

在將其交給 Wissam 之前，我想分享一些我們的觀點。在快閃記憶體領域，除了西部數據優勢所在的邊緣成長機會外，我們還對企業級 SSD 市場需求的回升感到鼓舞，並預計今年將實現成長。人工智慧相關的工作負載正在推動企業級 SSD 的需求不斷增長，而我們的產品組合能夠很好地支援這些用例。展望未來，我們預計第四財季的比特出貨量將保持平穩，並預計平均售價的快速增長將成為主要的收入增長動力，在供應緊張的情況下，我們重點將比特分配給最高價值的終端市場。

While we're pleased to see pricing trends moving in a positive direction, it's crucial to acknowledge the importance of maintaining capital discipline and only reinvesting capital back into the business once profitability improves further, and we see sustained demand. Overall, our continued focus on improving profitability through our innovation road map, disciplined capital spending and strategic pricing initiatives position us well for continued success in calendar year 2024 and into 2025 by offering the most capital and cost-efficient bits in the industry.

雖然我們很高興看到定價趨勢朝著積極的方向發展，但至關重要的是要認識到維持資本紀律的重要性，並且只有在盈利能力進一步提高並且我們看到持續的需求時才將資本重新投資到業務中。總體而言，我們繼續致力於透過創新路線圖、嚴格的資本支出和策略定價措施來提高獲利能力，透過提供業內最具資本和成本效益的產品，我們將在 2024 年和 2025 年繼續取得成功。

In HDD, the success of our portfolio of leading capacity enterprise products, combined with the restructuring efforts we've implemented in recent years are yielding improved unit economics and greater visibility. As cloud demand is recovering, we anticipate continued growth driven by higher nearline demand and better pricing as we are now in a supply-constrained environment. We're optimistic about aligning the pricing of our products to better mirror the innovation we are integrating into them, supporting long-term margin expansion in our HDD business. As we reap the rewards of the innovation and operational efficiencies that we've implemented, we will look for opportunities to reinvest in the business when the conditions are ripe for expansion. We will approach every capital allocation decision with a focus on discipline.

在硬碟領域，我們領先的容量企業產品組合的成功，加上我們近年來實施的重組努力，正在帶來單位經濟效益的改善和更大的知名度。隨著雲端需求的復甦，我們預計，由於近線需求的增加和定價的改善，雲端需求將持續成長，因為我們現在處於供應受限的環境中。我們對調整產品定價以更好地反映我們正在融入其中的創新持樂觀態度，從而支持我們硬碟業務的長期利潤擴張。當我們從所實施的創新和營運效率中獲得回報時，我們將在擴張條件成熟時尋找對業務進行再投資的機會。我們將注重紀律來處理每項資本配置決策。

Let me now turn the call over to Wissam, who will discuss our financial third quarter results.

現在讓我將電話轉給維薩姆，他將討論我們第三季的財務表現。

Thank you, and good afternoon, everyone. Following on David's comments, Western Digital return to profitability and free cash flow generation and delivered great results in the quarter, which exceeded expectations. Total revenue for the quarter was $3.5 billion, up 14% sequentially and 23% year-over-year. Non-GAAP earnings per share was $0.63.

謝謝大家，大家下午好。繼大衛的評論之後，西部數據恢復盈利並產生自由現金流，並在本季度取得了超出預期的出色業績。該季度總營收為 35 億美元，季增 14%，年增 23%。非 GAAP 每股收益為 0.63 美元。

Looking at end markets, cloud represented 45% of total revenue at $1.6 billion, up 45% sequentially and 29% year-over-year. The growth was primarily attributed to higher nearline shipments and improved nearline per unit pricing with Flash revenue up both sequentially and year-over-year. Nearline bit shipments of 108 exabytes were up 60% sequentially.

從終端市場來看，雲端收入佔總營收的 45%，達到 16 億美元，季增 45%，年增 29%。這一增長主要歸因於近線出貨量的增加以及近線單位定價的改善，其中閃存收入環比和同比均有所增長。近線位出貨量為 108 艾字節，較上季成長 60%。

Client represented 34% of total revenue at $1.2 billion, up 5% sequentially and 20% year-over-year. Sequentially, the increase in flash ASP more than offset a decline in flash bit shipments, while HDD revenue decreased. Year-over-year, the increase was driven by growth in both flash and HDD ASPs and flash bit shipments.

客戶收入佔總營收的 34%，達 12 億美元，季增 5%，年增 20%。隨後，快閃記憶體平均售價的成長足以抵消快閃記憶體位出貨量的下降，而硬碟收入則下降。與去年同期相比，這一增長是由快閃記憶體和硬碟平均售價以及快閃記憶體位出貨量的成長所推動的。

Consumer represented 21% of total revenue at $0.7 billion, down 13% sequentially and up 7% year-over-year. Sequentially, both flash and HDD were down at approximately similar rates and in line with seasonality. On a year-over-year basis, the increase was driven by growth in flash bit shipments and ASP.

消費者營收為 7 億美元，佔總營收的 21%，比上一季下降 13%，比去年同期成長 7%。隨後，快閃記憶體和 HDD 的下降速度大致相似，並且與季節性相符。與去年同期相比，這一成長是由快閃記憶體位出貨量和平均售價的成長所推動的。

Turning now to revenue by business segment for the fiscal third quarter. Flash revenue was $1.7 billion, up 2% sequentially as ASP increased 18% on both blended and like-for-like basis. Bit shipments decreased 15% from last quarter as we proactively focused our flash bit placement to maximize profitability. Flash revenue grew 30% from fiscal third quarter of 2023 on higher bits and ASP.

現在轉向第三財季按業務部門劃分的收入。 Flash 營收為 17 億美元，季增 2%，平均售價在混合和年比基礎上成長 18%。位元出貨量比上季下降了 15%，因為我們積極關注閃存位佈局以最大限度地提高盈利能力。由於更高的位數和平均售價，快閃記憶體收入較 2023 財年第三季成長了 30%。

HDD revenue was $1.8 billion, up 28% from last quarter, as exabyte shipments increased 41% and average price per unit increased 19% to $145. Compared to the fiscal third quarter of 2023, HDD revenue grew 17%, while total exabyte shipments and average price per unit were up 25% and 33%, respectively.

HDD 營收為 18 億美元，較上季成長 28%，艾字節出貨量成長 41%，單位平均價格成長 19% 至 145 美元。與 2023 年第三財季相比，HDD 營收成長了 17%，而艾字節總出貨量和單位平均價格分別成長了 25% 和 33%。

Moving to gross margin and expenses. Please note, my comments will be related to non-GAAP results unless stated otherwise. Gross margin was 29.3%, well above the guidance range. Gross margin improved 13.8 percentage points sequentially and 18.7 percentage points year-on-year due to better pricing, our continued focus on cost reduction, and lower underutilization charges. Flash gross margin was higher than expected at 27.4%, up 19.5 percentage points sequentially and 32.4 percentage points year-over-year. There were no underutilization charges in the quarter.

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。毛利率為29.3%，遠高於指引範圍。由於更好的定價、我們持續專注於降低成本以及降低未充分利用費用，毛利率環比提高了 13.8 個百分點，比去年同期提高了 18.7 個百分點。快閃記憶體毛利率高於預期，為 27.4%，較上季上升 19.5 個百分點，較去年同期上升 32.4 個百分點。本季沒有未充分利用的費用。

HDD gross margin was 31.1%, up 6.3 percentage points sequentially and 6.8 percentage points year-over-year. This includes underutilization charges of $17 million or 1 percentage-point headwind. HDD gross margin is within our long-term target range, including underutilization charges. This underscores the team's focus on cost reduction and profitability as previously, this level of gross margin was achieved with higher revenue.

硬碟毛利率為31.1%，較上季上升6.3個百分點，較去年同期上升6.8個百分點。其中包括 1700 萬美元的未充分利用費用或 1 個百分點的逆風。硬碟毛利率在我們的長期目標範圍內，包括未充分利用費用。這突顯了團隊對降低成本和獲利能力的關注，與之前一樣，這種毛利率水準是透過更高的收入實現的。

Operating expenses were $632 million for the quarter, up 13% sequentially and 5% year-over-year. The sequential increase was mainly driven by higher variable compensation associated with better-than-expected financial results. Operating income was $380 million, which included HDD underutilization charges of $17 million. Tax expenses in the quarter was $51 million, reflecting the improved financial outlook for the fiscal year. Fiscal third quarter earnings per share was $0.63.

本季營運費用為 6.32 億美元，季增 13%，年增 5%。環比成長主要是由於與好於預期的財務表現相關的更高的可變薪酬所致。營業收入為 3.8 億美元，其中包括 1,700 萬美元的 HDD 未充分利用費用。本季的稅務支出為 5,100 萬美元，反映出本財年財務前景的改善。第三財季每股收益為 0.63 美元。

Operating cash flow was $58 million and free cash flow was $91 million. Cash capital expenditures, which include the purchase of property, plant and equipment and activity related to flash joint ventures on the cash flow statement represented a cash inflow of $33 million. Third quarter inventory was flat from the prior quarter at $3.2 billion, with days of inventory increasing 4 days to 119 days. A decline in HDD inventory offset an increase in flash inventory.

營運現金流為 5,800 萬美元，自由現金流為 9,100 萬美元。現金流量表上的現金資本支出（包括購買不動產、廠房和設備以及與快閃記憶體合資企業相關的活動）代表現金流入 3,300 萬美元。第三季庫存與上一季持平，為 32 億美元，庫存天數增加 4 天，達到 119 天。 HDD 庫存的下降抵消了快閃記憶體庫存的增加。

Gross debt outstanding was $7.8 billion at the end of the fiscal third quarter. Cash and cash equivalents were $1.9 billion, and total liquidity was $4.1 billion, including revolver capacity of $2.2 billion.

截至第三財季末，未償債務總額為 78 億美元。現金和現金等價物為 19 億美元，流動資金總額為 41 億美元，其中循環流動資金為 22 億美元。

For the fiscal fourth quarter, our non-GAAP guidance is as follows. We expect revenue to be in the range of $3.6 billion to $3.8 billion and project sequential revenue growth in both HDD and Flash. In HDD, we expect continued momentum with our industry-leading SMR product portfolio aimed at the cloud. In Flash, we anticipate bits will be flat and ASP is up as we continue optimizing our bit placement to maximize profitability.

對於第四財季，我們的非公認會計準則指引如下。我們預計營收將在 36 億美元至 38 億美元之間，並預計 HDD 和快閃記憶體收入將持續成長。在 HDD 領域，我們預計業界領先的針對雲端的 SMR 產品組合將繼續保持強勁勢頭。在閃存中，我們預計位將持平，而隨著我們繼續優化位元佈局以最大限度地提高盈利能力，平均售價將上升。

Gross margin is expected to be between 32% and 34%. We expect operating expenses to be between $670 million and $690 million with the increase mainly related to certain project-driven investments, coupled with higher variable compensation as the financial outlook has continued to strengthen. Interest and other expenses are expected to be approximately $105 million. We expect income tax expense to be between $30 million and $40 million for the fiscal fourth quarter and $130 million to $140 million for fiscal year 2024 as the financial outlook improved.

毛利率預計在32%至34%之間。我們預計營運費用將在 6.7 億美元至 6.9 億美元之間，成長主要與某些項目驅動的投資有關，加上隨著財務前景持續走強，可變薪酬更高。利息和其他費用預計約為 1.05 億美元。隨著財務前景的改善，我們預計第四財季的所得稅費用將在 3,000 萬至 4,000 萬美元之間，2024 財年的所得稅費用將在 1.3 億至 1.4 億美元之間。

We expect earnings per share to be $1.05, plus or minus $0.15, based on approximately 342 million shares outstanding. The financial outlook has strengthened, and we will remain disciplined in executing the business, controlling our capital spending and improving our profitability.

基於約 3.42 億股流通股，我們預期每股收益為 1.05 美元，正負 0.15 美元。財務前景有所改善，我們將繼續嚴格執行業務、控制資本支出並提高獲利能力。

I will 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. I'm pleased with the team's performance in developing a diversified portfolio of industry-leading products across a broad range of end markets. As industry supply and demand dynamics continue to improve, we will remain disciplined around our capital spending and focused on driving innovation and efficiency across our business. Coupled with the structural changes we have made to our businesses, we are confident in our ability to drive greater through-cycle profitability and dampen business cycles.

謝謝，維薩姆。讓我總結一下，然後我們將開始提問。我對該團隊在廣泛的終端市場開發多元化的行業領先產品組合方面的表現感到滿意。隨著產業供需動態持續改善，我們將繼續嚴格控制資本支出，並專注於推動整個業務的創新和效率。加上我們對業務進行的結構性變革，我們對推動更大的整個週期獲利能力和抑製商業週期的能力充滿信心。

As we move forward, we remain uniquely positioned to capitalize on the promising growth prospects that lie ahead, solidifying our leadership position in the industry, particularly as AI continues to drive new storage solution opportunities and growth.

隨著我們的前進，我們仍然處於獨特的地位，可以利用未來充滿希望的成長前景，鞏固我們在行業中的領導地位，特別是在人工智慧繼續推動新的儲存解決方案機會和成長的情況下。

Okay. Peter, let's start the Q&A.

好的。彼得，讓我們開始問答。

(Operator Instructions) Our first question today comes from C.J. Muse from Cantor Fitzgerald.

（操作員說明）今天我們的第一個問題來自 Cantor Fitzgerald 的 C.J. Muse。

I guess first question on the HDD side, the gross margins are spectacular. And if we take out the underutilization you're north of 32%. So curious from here as you think about ongoing tightness, ongoing growth in demand led by the cloud and a pricing strategy where I think you and your main competitor are being extraordinarily rational. How do you think the progression for that part of your business will look through the remainder of calendar '24 and into '25?

我想第一個問題是硬碟方面的毛利率非常驚人。如果我們剔除未充分利用的部分，則利用率將超過 32%。當你想到持續的緊張、雲端主導的需求持續成長以及定價策略時，你會感到非常好奇，我認為你和你的主要競爭對手都非常理性。您認為您這部分的業務在 24 日曆年剩餘時間和 25 日曆年的進度如何？

C.J., thanks for the question. Yes, we're -- the HDD business, we're really happy with where the portfolio is at. I think that's where it starts, bringing great products to market that deliver the highest capacity points and the best TCO for our customers. And when we're able to do that, we can share in more of that TCO advantage we're bringing to market. I think that's been the strategy for quite some time, and we're really happy with where the portfolio is and it's really resonating with customers.

C.J.，謝謝你的提問。是的，我們是硬碟業務，我們對產品組合的現狀非常滿意。我認為這就是一切的起點，將出色的產品推向市場，為我們的客戶提供最高的容量點和最佳的整體擁有成本。當我們能夠做到這一點時，我們就可以分享更多我們推向市場的 TCO 優勢。我認為這已經是相當長一段時間以來的策略了，我們對產品組合的現狀非常滿意，並且確實引起了客戶的共鳴。

But the other side of that is making sure we really control the cost side of it. So we're really focused on making sure we bring the lowest cost product as well, and that leads to the margin expansion. And then we -- of course, we've got a returning demand environment as we get the cyclical recovery in HDD spending coming off of the lows that we all really understand.

但另一方面是確保我們真正控製成本。因此，我們真正專注於確保我們提供成本最低的產品，從而實現利潤率擴張。當然，隨著硬碟支出從我們都真正理解的低點開始週期性復甦，我們的需求環境正在回升。

But going forward, we talked about a little bit in the prepared remarks. We expect to continue to bring great products to market. We expect to continue to drive better TCO for our customers. And we're in an environment now where we have supply demand balance and significant restructuring of our business during the downturn. We've taken capacity -- we've set our capacity of what we think the market needs as we emerge into this demand environment. We do see better supply-demand alignment. We see tightness in the market. that's leading to what you would expect as customers giving us more visibility into what their ordering looks like going forward. So we're optimistic about being able to continue to drive profitability of this business higher.

但展望未來，我們在準備好的發言中討論了一些內容。我們期望繼續將優秀的產品推向市場。我們期望繼續為客戶帶來更好的 TCO。我們現在所處的環境是，在經濟低迷時期，我們實現了供需平衡，並且對我們的業務進行了重大重組。我們已經採取了產能——當我們進入這種需求環境時，我們已經確定了我們認為市場需要的產能。我們確實看到了更好的供需協調。我們看到市場緊張。這就是您所期望的，因為客戶可以讓我們更清楚地了解他們未來的訂購情況。因此，我們對能夠繼續提高該業務的盈利能力持樂觀態度。

Very helpful. And as a quick follow-up, on the NAND side, I think you guided last kind of high-teens bit growth. And I'm just curious, is that still a number in play? Or given your prioritization of highest profitable areas of NAND, should we be thinking about a different number? And here not talking about production, but actual revenue bits.

很有幫助。作為快速跟進，在 NAND 方面，我認為您引導了最後一種高十位數的成長。我只是好奇，這個數字還在發揮作用嗎？或者考慮到您優先考慮 NAND 利潤最高的領域，我們是否應該考慮不同的數字？這裡不是談產量，而是實際收入。

You mean for our -- for what time period, just to make sure I understand your question.

你的意思是我們的——什麼時間段，只是為了確保我理解你的問題。

My apologies, for calendar '24.

抱歉，日曆為「24」。

Oh, Calendar '24, look, we see -- yes, we still see demand in the mid to -- call it, the mid- to high teens for the market. We see supply like about 8% of bits in production. So we still see an undersupplied market. For us, we had bits down this quarter. We forecast them down double digits. We were right about that, maybe a little bit more flat going into next quarter as we kind of optimize our supply throughout the year where we can think we can get the best profitability.

哦，日曆 '24，看，我們看到 - 是的，我們仍然看到市場需求在中到 - 所謂的中到十幾歲之間。我們看到供應量約佔生產中鑽頭的 8%。所以我們仍然看到市場供應不足。對我們來說，本季我們的業績有所下降。我們預測它們會下降兩位數。我們的看法是對的，進入下個季度可能會更加平穩，因為我們全年都會優化供應，我們認為我們可以獲得最佳的盈利能力。

Our next question comes from Joe Moore from Morgan Stanley.

我們的下一個問題來自摩根士丹利的喬摩爾。

Congratulations on the results. In terms of the outlook, looking for 4 points of gross margin improvement. It seems like the like-for-like pricing, certainly in NAND is a lot better than that. HDD seems pretty good as well. What are the offsets that you only would see sort of 4 points of gross margin expansion given the improvement that we're seeing in absolute pricing?

祝賀結果。展望方面，毛利率可望提升4個百分點。看起來 NAND 的同類定價肯定比這要好得多。 HDD 看起來也不錯。鑑於我們在絕對定價方面看到的改善，您只會看到毛利率擴張 4 個百分點的抵銷是什麼？

Joe, thanks for the question. Look, our guide comprehends a balanced view of what we have in terms of information today with the outlook. Yes, we see improvement in margins in both of the businesses. So on the flash side, we still anticipate improvement in pricing that will help gross margin move a bit higher from here. And on the HDD side, as David mentioned, we continue to focus on the obviously, the great technology that we deliver, but also the cost discipline and pricing of the products. So all of these are comprehended in our guide.

喬，謝謝你的提問。看，我們的指南對我們今天所掌握的資訊和前景有一個平衡的看法。是的，我們看到這兩項業務的利潤率都有提高。因此，在快閃記憶體方面，我們仍然預計定價會有所改善，這將有助於毛利率進一步提高。在硬碟方面，正如大衛所提到的，我們繼續關注我們提供的明顯的、偉大的技術，但也關注產品的成本控制和定價。因此，所有這些都包含在我們的指南中。

Great. And then as a follow-up, you sort of talked about these higher density SSDs in the second half of the calendar year for AI purposes. Can you talk about what has to happen to sort of get those drives out? Like is it you need new capacity points that you don't currently serve, and then can you talk generally, it seems like AI is having some positive effects on both sides of your guys' business. Can you talk about that a little bit?

偉大的。作為後續行動，您在今年下半年談到了這些用於人工智慧目的的更高密度 SSD。您能談談如何才能將這些驅動器取出來嗎？就像您需要當前不提供的新容量點一樣，然後您可以籠統地說一下，人工智慧似乎對您雙方的業務都產生了一些積極影響。你能談談這個嗎？

Yes. So what I would say about the AI demand as it's coming into focus. I don't think it's so much in the results just yet, but we're seeing where it's going to impact both businesses. And clearly, one of them you just outlined, which is we're seeing enterprise SSD demand return, we saw some increase in the last quarter. We expect some increase in this quarter. But really, as we look to the second half. We have customers coming to us wanting the kind of SSDs we built and qualified before the downturn. They just want them in much bigger capacity points, 30 and 60 terabyte capacity points. So it's the same product just taking it and increasing capacity and going through a qualification on that. So we're in that process with customers.

是的。那麼，當人工智慧需求成為人們關注的焦點時，我要說的是。我認為這對結果影響還不是很大，但我們正在看到它將對兩家公司產生什麼影響。顯然，您剛才概述的其中之一是，我們看到企業級 SSD 需求有所回升，我們在上個季度看到了一些成長。我們預計本季會有一些成長。但實際上，當我們展望下半場時。有客戶來找我們，想要我們在經濟衰退之前製造並合格的 SSD。他們只是希望它們有更大的容量點，30 和 60 TB 的容量點。因此，這是同一種產品，只是採用它並增加容量並通過資格認證。所以我們正在與客戶一起進行這個過程。

We also introduced a new SSD that's more compute focused, which is PCIe Gen 5 product based on BiCS6, very high performance that plays a little bit different role in the AI training stack, and we're getting very good feedback on that product. It's being qualified by our starting qualification, we samples. We're kind of getting rid of the qualification of the hyperscaler, and we're seeing good demand in the enterprise market as well. So we feel like the portfolio set up well as we go into the second half, and we're seeing a lot of demand show up for people that are very building large amount of infrastructure for model training.

我們也推出了一款更注重運算的新型SSD，它是基於BiCS6 的PCIe Gen 5 產品，具有非常高的效能，在AI 訓練堆疊中扮演著稍微不同的角色，我們對該產品獲得了非常好的回饋.它通過了我們的起始資格，我們進行抽樣。我們正在擺脫超大規模提供者的資格，我們也看到企業市場的良好需求。因此，我們覺得進入下半年後，產品組合建立得很好，我們看到人們對為模型訓練建造大量基礎設施的人們提出了許多需求。

Our next question comes from Aaron Rakers from Wells Fargo.

我們的下一個問題來自富國銀行的 Aaron Rakers。

Yes. I've got 2 as well. The first question, I just want to go back to kind of like the gross margin dynamics with regard to the (inaudible) business. David, if you look back a couple of years, right, you peaked at like 150, 155 exabytes of capacity shifts. As we hear about the industry being constrained, where do you -- where would you characterize your capacity footprint today? And is it fair to assume that you have to see gross margin at or even above the high end of the 31% to 34% target model that you've laid out to kind of come back in and add capacity?

是的。我也有2個。第一個問題，我只想回到（聽不清楚）業務的毛利率動態。 David，如果您回顧幾年，您會發現容量變化的峰值約為 150、155 艾字節。當我們聽到該行業受到限制時，您會在哪裡描述您今天的產能足跡？假設您必須看到毛利率達到或甚至高於您為回歸並增加產能而製定的 31% 至 34% 目標模型的高端，這是否公平？

Yes. I mean, that's how we're thinking about it. I mean this is a -- I've talked about this quite a bit. And this is an industry that I think has been oversupplied with this client-to-cloud transition that's been going on for 15 years. I think the downturn was in time when we saw a significant change in demand to say the least, that we just decided to remove capacity to get supply and demand better balance. So as we -- we're just emerging into that market, Aaron. I mean I think as we start to see this market play out and dynamics get to the kind of business model and get more visibility into what the future is. We can have confidence in making investments if that's what we need to do to expand capacity.

是的。我的意思是，我們就是這麼想的。我的意思是這是——我已經談過很多次了。我認為這個行業已經供過於求，從客戶端到雲端的轉變已經持續了 15 年。我認為，當我們看到需求發生重大變化時，至少可以說，經濟低迷恰逢其時，我們只是決定消除產能，以實現供需更好的平衡。因此，我們剛剛進入這個市場，亞倫。我的意思是，我認為，隨著我們開始看到這個市場的發展，商業模式的動態變化，並對未來有了更多的了解。如果我們需要擴大產能，我們就有信心投資。

I think as all of that comes into focus, and it's starting to happen. We're starting to see that. We're getting more visibility. We're getting to participate more in the TCO advantages that we're bringing to the market. We're seeing better dynamics. And as that continues, and we get more confidence, we're not there yet, then we would think about how do we bring more capacity into the market. But we're just at the -- we're kind of getting to the starting line is, I guess, what I would say.

我認為，當所有這些都成為焦點時，它就開始發生。我們開始看到這一點。我們的知名度越來越高。我們將更多地參與我們為市場帶來的 TCO 優勢。我們看到了更好的動態。隨著這種情況的持續，我們會變得更有信心，但我們還沒有達到目標，然後我們會考慮如何將更多產能引入市場。但我想，我想說的是，我們正處於起步階段。

Yes. That's helpful. And then as a quick follow-up, just on the enterprise SSD topic. I think prior to the downturn, you had talked about, I want to say it was 2 or 3 cloud OEMs that you had designed in with the NVMe drive. Can you just talk about the breadth of what you're expecting? It just sounds like you're kind of getting back into the market, optimizing displacement there. So how do we think about the breadth of the customer base in that enterprise SSD space?

是的。這很有幫助。然後作為快速跟進，僅討論企業級 SSD 主題。我想在經濟低迷之前，您曾談到，我想說的是您設計了 NVMe 驅動器的 2 或 3 個雲端 OEM。您能談談您期望的廣度嗎？聽起來你好像要重返市場，優化那裡的排氣量。那我們該如何看待企業級 SSD 領域客戶群的廣度呢？

Yes, you got it. I mean it's the -- what we're seeing now is when the market is coming back, we're seeing those customers now come back up to a very long digestion period. And this is something we've been waiting for, for quite some time. Like every market from consumer to PC to nearline on the HDD side has gone through this big digestion phase. And I think enterprise SSD was the one we were waiting to see when we're going to come out of that. And that's what we're starting to see.

是的，你明白了。我的意思是，我們現在看到的是，當市場恢復時，我們看到這些客戶現在恢復到非常長的消化期。這是我們等待很長一段時間的事情。就像從消費者到 PC 再到 HDD 方面的近線市場一樣，每個市場都經歷了這個大消化階段。我認為企業級 SSD 是我們期待看到的產品。這就是我們開始看到的。

So we're seeing a couple of dynamics in that market. We're seeing those enterprise SSDs that we had qualified, the very same products now we're getting orders for as that digestion phase ends and they get -- they start to ramp ordering back. And then we're seeing the kind of AI impact on different capacity points use for model training, we're starting to see that demand come in the market. So we're seeing both of those things happen. We think the portfolio is well positioned for those markets. We expect that to play out through the rest of the year, and we're excited about it.

因此，我們看到了該市場的一些動態。我們看到那些我們已經合格的企業級SSD，與我們現在收到的訂單完全相同的產品，隨著消化階段的結束，他們開始增加訂單。然後我們看到人工智慧對用於模型訓練的不同容量點的影響，我們開始看到市場上的需求。所以我們看到這兩件事都發生了。我們認為該投資組合非常適合這些市場。我們預計這一情況將在今年剩餘時間內持續下去，我們對此感到興奮。

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)。

On the HDD side, you had a very outsized exabyte quarter-on-quarter growth in the quarter relative to your nearest competitor. How are you thinking about the continued trajectory here in terms of exabyte growth perhaps both quarter-on-quarter basis, but also maybe calendar '24 versus calendar '23.

在 HDD 方面，與最接近的競爭對手相比，本季您的 EB 季度環比增長非常大。您如何看待這裡艾字節成長的持續軌跡，可能是季度環比增長，也可能是日曆 '24 與日曆 '23 的增長。

Yes. We're seeing -- I mean, big picture, we're seeing a return in demand. Obviously, I think it was the largest sequential exabyte growth we've seen in a very long time. I hesitate to say ever because this is -- business has been around a very long time. But to go back as far as we could look, it was the biggest sequential increase we had seen. And it's -- as I said earlier, that starts with having products that really resonate with our customers. We really believe very strongly in the technology road map we've built around ePMR and UltraSMR is resonating very strongly with customers. Nearly 50% of exabytes shipped this quarter was SMR, and we're set up well for what we talked about last time where we expect over half of our exabytes in FY '25 to be SMR-based.

是的。我們看到——我的意思是，從大局來看，我們看到需求的回報。顯然，我認為這是我們很長一段時間以來看到的最大的連續艾字節增長。我猶豫是否要說，因為這個行業已經存在很久了。但就我們所知，這是我們所見過的最大的連續成長。正如我之前所說，首先要擁有真正能引起顧客共鳴的產品。我們非常相信我們圍繞 ePMR 構建的技術路線圖，並且 UltraSMR 與客戶產生了強烈的共鳴。本季度發貨的艾字節中有近 50% 是 SMR，我們已經為上次討論的內容做好了準備，我們預計 25 財年超過一半的艾字節將基於 SMR。

So like we said, coming into the fiscal year that we expected sequential growth throughout the fiscal year, last quarter, we extended that to the calendar year, and we still see that. So we still see sequential exabyte growth going forward throughout this calendar year.

正如我們所說，進入本財年，我們預計整個財年會出現連續增長，上個季度，我們將其延長到了日曆年，我們仍然看到了這一點。因此，我們仍然看到今年艾字節的連續成長。

Okay. And as a follow-up, on sort of reinvesting on capacity side, right, on the HDD side? I think you said when conditions are ripe for reinvesting, and I know to Aaron's question earlier, you commented on certain gross margin ranges. But this cycle, your gross margin is much higher at lower revenue levels than past cycles. So clearly, it feels as though, at least the capability to drive peak margins much higher than your established long-term range. So why should 33% be maybe the level at which you reinvest? Why wouldn't it be 34%, 35% or higher than that?

好的。作為後續，在容量方面進行再投資，對吧，在硬碟方面？我想你說過當再投資的條件成熟時，我知道對於亞倫早些時候的問題，你評論了某些毛利率範圍。但在這個週期中，在收入水平較低的情況下，你的毛利率比過去的周期要高得多。很明顯，感覺至少有能力將峰值利潤率推得遠高於既定的長期範圍。那麼為什麼 33% 可能是您再投資的水平呢？為什麼不是 34%、35% 或更高呢？

Well, we haven't really set a bogey for that, right? We want to look at the holistic marketing. Again, that -- I understand this question everybody is looking for when we would reinvest. But that's really not what we're even thinking about right now. We're thinking about getting a market that's balanced on supply and demand, delivering great products to our customers that can meet the needs of the growth of the cloud. And I think that -- to your point, I think the business is emerging what we planned for and a lot of hard work that went in over the last couple of years, which is to come back in a much healthier position with the ability to drive greater profitability.

好吧，我們還沒有真正為此設置柏忌，對吧？我們想看看整體行銷。再說一次，我理解每個人在我們進行再投資時都在尋找的這個問題。但這確實不是我們現在正在考慮的。我們正在考慮建立一個供需平衡的市場，為我們的客戶提供能夠滿足雲端成長需求的優質產品。我認為，就你的觀點而言，我認為該業務正在按照我們的計劃發展，並且在過去幾年中進行了大量的艱苦工作，即以更健康的狀態回歸，並有能力推動更大的盈利能力。

So we're just getting back to the bottom of the range that we set a couple of years ago. It's not as if we're declaring victory in that at all, to your point, like I said, I feel like we're just getting back to the starting line of where we need to drive the business to, but we feel very good about to be able to drive increased profitability in it.

所以我們只是回到了幾年前設定的範圍的底部。這根本就不是我們在宣布勝利，就你的觀點而言，就像我說的，我覺得我們只是回到了我們需要推動業務發展的起跑線，但我們感覺非常好即將能夠提高其盈利能力。

Look, it starts with delivering great products to your customers. Like we have to continue to bring better TCO. And I think we have got a tremendous architecture to do that while controlling our cost to build the product. We have to work stay focused on both sides of this equation. We got to have the lowest cost and then the best TCO that allows us to drive pricing, which drives margin expansion.

看，一切始於向客戶提供優質產品。就像我們必須繼續帶來更好的 TCO。我認為我們擁有一個巨大的架構來做到這一點，同時控制建構產品的成本。我們必須努力關注這個等式的兩邊。我們必須擁有最低的成本，然後是最好的整體擁有成本，使我們能夠推動定價，從而推動利潤率擴張。

So we're working across that whole equation. And I think the strategy is working quite well. And that's why we saw -- when we saw some -- we saw the demand return, we saw the margins pop up. But to your point, we believe we can -- we're just getting started on this.

所以我們正在研究整個方程式。我認為這個策略運作得很好。這就是為什麼我們看到——當我們看到一些時——我們看到需求回升，我們看到利潤率突然上升。但就你的觀點而言，我們相信我們可以——我們才剛開始。

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。

I'm curious your thoughts on the decision to prioritize the transition to BiCS6 for the mobile market rather than SSDs because AI demand appears concentrated in high-capacity enterprise SSDs. And I guess as you address that question, could you discuss your opportunity to provide QLC enterprise SSD to address these inference applications that appear to be supporting 30- and 60-terabyte units?

我很好奇您對優先向行動市場過渡到 BiCS6 而不是 SSD 的決定有何看法，因為 AI 需求似乎集中在大容量企業級 SSD 上。我想當您回答這個問題時，您能否討論一下提供 QLC 企業級 SSD 來解決這些似乎支援 30 TB 和 60 TB 單元的推理應用程式的機會？

Yes. Thanks, Karl. So haven't really said where BiCS6 is going to go. That's in our future. That's one thing we feel really good about is the technology is there, and we'll bring it to market when we see it's the right time to do that when we got the right profitability, the right supply-demand characteristics to invest in productizing that node, the technology is in great shape. But we haven't really outlined exactly, which products are going to go there first or second or third. So that's still in our future.

是的。謝謝，卡爾。所以還沒有真正說出 BiCS6 將走向何方。那是我們的未來。我們感到真正滿意的一件事是技術已經存在，當我們認為時機成熟時，當我們獲得正確的盈利能力、正確的供需特徵來投資生產該技術時，我們會將其推向市場。狀況良好。但我們還沒有真正準確地概述哪些產品將首先、第二或第三進入那裡。所以這仍然是我們的未來。

As far as your point on QLC, this is -- we're now starting to transition to BiCS6. And so we talked about a couple -- a number of products here that are BiCS6 based, which first, the client SSD, you didn't -- I'll talk about enterprise SSD as well, but we -- our client SSD has been extremely well received. The performance of it is outstanding. We have our own internal controller team. They've done an amazing job of building a really, really high-performance QLC client SSD. We expect that to lead the market and lead that transition in that part of the market.

就您對 QLC 的觀點而言，我們現在開始過渡到 BiCS6。所以我們討論了一些 - 這裡的一些產品是基於 BiCS6 的，首先是客戶端 SSD，你沒有 - 我也會談論企業 SSD，但是我們 - 我們的客戶端 SSD 有受到熱烈歡迎。其性能表現十分出色。我們有自己的內部控制團隊。他們在建立真正、真正高效能的 QLC 用戶端 SSD 方面做得非常出色。我們預計這將引領市場並引領該市場的轉型。

And then we're bringing BiCS6 into our enterprise SSDs as well, right? So that will be lever we have to drive BiCS6, which gives us more capacity, better performance. And so we feel good about that transition is now starting and the products are starting to show up. They're in customers' hands, and they've been very, very well received.

然後我們也將 BiCS6 引入我們的企業級 SSD，對吧？因此，這將是我們驅動 BiCS6 的槓桿，它為我們提供了更大的容量和更好的性能。因此，我們對現在開始的轉變以及產品開始出現感到滿意。它們在客戶手中，並且受到了非常非常好的歡迎。

Our next question comes from Amit Daryanani from Evercore.

我們的下一個問題來自 Evercore 的 Amit Daryanani。

I have 2 questions as well, I guess. First on the HDD side, I'm wondering, do you think given some of the challenges on HAMR qualifications that Seagate's having, if you potentially saw a bigger uplift in market on the nearline side, and you think that market share could potentially sustain or does some of that kind of flow back as those qualifications get done. So I'd love to understand if the share gains you think you're seeing are sustainable or not?

我想我也有兩個問題。首先在硬碟方面，我想知道，考慮到希捷在 HAMR 資格方面面臨的一些挑戰，您是否認為近線端市場有更大的提升，並且您認為市場份額可能會維持或當這些資格完成後，其中的一些內容會回流嗎？所以我很想知道您認為所看到的份額增長是否可持續？

And then on the Flash side, I would love to just maybe get your perspective. I know you folks are talking about bit growth being flat in June. But as some of these qualifications ramp up in the back half, how do you think about bit growth ramping up into the back half of this calendar year?

然後在 Flash 方面，我很想聽聽您的看法。我知道你們正在談論 6 月的比特成長持平。但隨著其中一些資格在下半年有所增加，您如何看待今年下半年的比特成長？

Yes. So on the first question, the business with our customers is planned pretty far in advance. So there wouldn't be a situation where something would happen intra-quarter and that would drive a big share shift. The reality is we've got great products, and they're very much resonating with our customers and we can deliver them at scale. And they have bring best-in-class TCO. And clearly, customers are adopting those at a significant rate. So -- like is it sustainable? We continue to bring great products to market. That's what we plan to do. We're very confident in our road map on HDD, and we'll continue to bring the best TCO solutions to our customers.

是的。因此，關於第一個問題，我們與客戶的業務是事先規劃好的。因此，不會出現季度內發生某些事情而導致份額大幅變化的情況。現實是，我們擁有出色的產品，它們與我們的客戶產生了強烈的共鳴，我們可以大規模地交付它們。他們還帶來了一流的 TCO。顯然，客戶正在以顯著的速度採用這些技術。那麼——它可持續嗎？我們繼續將優秀的產品推向市場。這就是我們計劃要做的。我們對 HDD 路線圖非常有信心，我們將繼續為客戶帶來最佳的 TCO 解決方案。

On bit growth, we do expect flat bit growth into the calendar Q2, but we'll see a pickup in bit growth in the second half of the year.

在比特成長方面，我們確實預計第二季的比特成長將持平，但我們將在下半年看到比特成長的回升。

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。

Nice job on the quarterly execution. Another question on enterprise SSD. So you guys have been really smart on how you are allocating flash bits, right, with a strong focus on profitability. So as you reallocate more bits towards eSSD in the second half, is the profitability profile of enterprise SSD portfolio expected to be accretive to the overall flash business and your shares peaked previously sort of in that sort of high single-digit percentage range in enterprise? Just given a more competitive portfolio, like what type of share is the team targeting kind of mid- to longer term?

季度執行情況良好。另一個關於企業級SSD的問題。所以你們在如何分配閃存位方面非常聰明，對吧，重點是獲利能力。因此，當您在下半年向 eSSD 重新分配更多位時，企業級 SSD 產品組合的盈利狀況是否預計會增加整個閃存業務，並且您的股價之前在企業中達到高個位數百分比範圍內的峰值？只要給出更具競爭力的投資組合，例如團隊的中長期目標是什麼類型的份額？

Okay. Thanks, Harlan, your questions are very related. So we saw a pickup in enterprise SSD in the March quarter. It's still -- quite honestly, it's still relatively small numbers, but it's growing quite well. So it's -- we wouldn't have supplied those bits if it wasn't the right thing to do from a portfolio strategy point of view. We'll see when we get to the second half, what pricing looks like, that versus other options we have, and then we'll decide how much supply we put into those products.

好的。謝謝哈倫，你的問題非常相關。因此，我們看到企業級 SSD 在三月季度有所回升。老實說，這個數字仍然相對較小，但成長得相當不錯。所以，如果從投資組合策略的角度來看這不是正確的做法，我們就不會提供這些內容。當我們進入下半年時，我們會看看定價是什麼樣的，與我們擁有的其他選擇相比，然後我們將決定我們向這些產品投入多少供應。

And you're really getting into core of our portfolio strategy, which is to have a lot of optionality. We have a lot of optionality across client SSD, across gaming, now across enterprise SSD, across mobile, across consumer, obviously, which is a big business for us. And then based on what we see going into the quarter. And then very importantly, what happens during the quarter, how do we allocate our supply to get the best return. And clearly, we're in an environment right now where things got better throughout the quarter.

您真正進入了我們投資組合策略的核心，即有很多選擇。我們在客戶端 SSD、遊戲、現在企業 SSD、行動裝置、消費者方面有很多選擇，顯然，這對我們來說是一項大業務。然後根據我們對本季的情況進行觀察。然後非常重要的是，本季會發生什麼，我們如何分配供應以獲得最佳回報。顯然，我們現在所處的環境整個季度情況都在好轉。

So as we go through the quarter, we find more opportunity to mix and get more profitability, and that's what happened in the March quarter, and you saw the results of having that agility into the business. So I really don't want to call a share number or anything like that because it tends to distort, what we want to do is maximize profitability, not maximize share in any particular market. We want to maximize where we get the most return for our supply.

因此，當我們經歷這個季度時，我們發現了更多的機會來混合併獲得更多的盈利能力，這就是三月份季度發生的情況，您看到了業務敏捷性的結果。所以我真的不想稱呼股票數字或類似的東西，因為它往往會扭曲，我們想要做的是最大化獲利能力，而不是最大化任何特定市場的份額。我們希望最大限度地提高我們的供應回報。

I appreciate that. And then maybe a question on BiCS8. I know you're not calling out any timing yet, but you have had it sort of in preproduction for quite some time. How are the early yields on this technology? And I guess, more importantly, like can the team still drive mid-teens percentage annualized type cost down with the new bonded to array technology?

我很感激。然後可能是關於 BiCS8 的問題。我知道你還沒有確定任何時間，但你已經在預製作中進行了相當長的一段時間了。這項技術的早期產量如何？我想，更重要的是，團隊是否仍然可以透過新的黏合到陣列技術來降低年化成本百分比？

Yes. So what I'll say about yields is we're very confident in the technology. I mean, we feel very, very good about it. It's a major advancement in the architecture of NAND from an industry perspective to the CBA architecture. And it's -- the development has gone well. We feel very good about it. We can productize it when we need it. Again, this gets into a larger conversation about the dynamics of the market and when is the supply needed, and we're going to be very, very disciplined about going through any transition or putting any CapEx to the market until we see the profitability that we want to get. So we feel very good about BiCS8. There was a second part of the question.

是的。因此，關於產量，我要說的是我們對這項技術非常有信心。我的意思是，我們對此感覺非常非常好。從產業角度來看，這是NAND架構相對於CBA架構的重大進步。發展進展順利。我們對此感覺非常好。我們可以在需要時將其產品化。再次，這涉及到關於市場動態以及何時需要供應的更大討論，我們將非常非常嚴格地進行任何轉型或將任何資本支出投入市場，直到我們看到盈利能力我們想要得到。所以我們對 BiCS8 感覺非常好。問題還有第二部分。

On the cost downs.

關於成本下降。

Oh, cost downs.

哦，成本下降。

Yes, maybe I'll take that, Harlan. Yes. On the cost down, we're still anticipating the mid-teens percentage year-on-year cost downs. So there's no change there.

是的，也許我會接受，哈倫。是的。在成本下降方面，我們仍然預期成本將年減幅度為百分之十左右。所以那裡沒有變化。

Our next question comes from Carlos Colorado from UBS.

我們的下一個問題來自瑞銀集團 (UBS) 的 Carlos Colorado。

So I have -- the first one is about nearline. You are going outperforming your competition by a lot. So what are the underlying reasons in your opinion for this? And do we have to expect this to normalize over time? And do you think this can be sustained? And I have a follow-up.

所以我——第一個是關於近線的。您的表現將會遠遠超過您的競爭對手。那麼您認為造成這種情況的根本原因是什麼？我們是否必須期望這種情況會隨著時間的推移而正常化？您認為這種情況可以持續嗎？我有一個後續行動。

Yes, it's -- the performance of the HDD business is driven by the product, right? It's pretty straightforward. Products are -- they're great products. This architecture that we built on ePMR, OptiNAND, UltraSMR, customers are really committed to SMR. They deliver the best TCO in the market. We can produce them at scale and that's what leads to the performance.

是的，HDD 業務的表現是由產品驅動的，對嗎？這非常簡單。產品是－它們是很棒的產品。我們基於 ePMR、OptiNAND、UltraSMR 所建構的架構，客戶真正致力於 SMR。他們提供市場上最佳的 TCO。我們可以大規模生產它們，這就是提高效能的原因。

Okay. And the follow-up is, you mentioned that AI's revenues are of SSD sales. You have a perfect vantage point to see if AI is driving applications that traditionally where HDD is that now being transferred to SSD some of those applications, or is the classic question on cannibalization from one to the other. Is that -- is AI changing that scenario?

好的。接下來，您提到AI的收入是SSD銷售。您有一個完美的有利位置來查看人工智慧是否正在驅動傳統上由HDD 驅動的應用程序，而現在其中一些應用程式正在轉移到SSD，或者是從一個應用程式到另一個應用程式的蠶食的經典問題。人工智慧正在改變這種情況嗎？

We do not see any cannibalization. Clearly HDD plays a big role in the AI storage life cycle as well as the whole ingest phase, because all of the big data lakes and all of the raw data sets, those are all going to be stored on HDD. It's just the economics of where you store that data, and how do you access that data. It's all that part of the AI pipeline, if you will, is going to be HDD.

我們沒有看到任何蠶食。顯然，HDD 在人工智慧儲存生命週期以及整個攝取階段發揮著重要作用，因為所有大數據湖和所有原始資料集都將儲存在 HDD 上。這只是儲存資料的位置以及如何存取這些資料的經濟問題。如果你願意的話，人工智慧管道的所有部分都將是 HDD。

Now you have all of these other new use cases around training and inference, and those are all going to be SSDs. So it's really about growth as opposed to substitution. And that's what's so exciting about this. And obviously, once you get the models trained, then the models are going to turn out more data, which is going to be stored on HDD. So you got this virtuous cycle going.

現在您擁有了圍繞訓練和推理的所有其他新用例，而這些都將是 SSD。因此，這實際上是關於增長而不是替代方案。這就是令人興奮的地方。顯然，一旦模型經過訓練，模型就會產生更多數據，這些數據將儲存在硬碟上。這樣就形成了良性循環。

So it's kind of literally rising tide lifts all boats. It's not a substitution game. Clearly, there's a lot of new use cases being developed around AI, like the whole training infrastructures that are being built, that's what's driving these very high capacity storage-based enterprise SSDs that we're seeing demand for. So hopefully, that helps.

所以這其實是水漲船高。這不是一場換人遊戲。顯然，圍繞人工智慧正在開發許多新的用例，例如正在建立的整個培訓基礎設施，這就是推動我們看到對這些基於高容量儲存的企業級 SSD 的需求的原因。希望這會有所幫助。

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 have 2 of them. First one on Flash for Dave. You spoke about the BiCS6 hyperscaler qualifying it. My understanding was a BiCS6 was kind of more like a sub node and BiCS8 is going to be the bigger one. I'm just kind of curious to get to your enterprise SSD market share target. Do you really need BiCS8, or can you achieve it with BiCS6? And then I have a follow-up.

我有 2 個。第一個是關於 Dave 的 Flash。您談到了 BiCS6 超大規模器對其進行資格認證。我的理解是 BiCS6 更像是子節點，而 BiCS8 將是更大的節點。我只是很好奇你們的企業級 SSD 市佔率目標。您真的需要 BiCS8，還是可以透過 BiCS6 實現？然後我有一個後續行動。

You're right. BiCS6 is when we say stub node, it's we're not going to take the whole portfolio to BiCS6. So we have a big portfolio, and we're choosing which products to take the BiCS6. And clearly, we're taking the products that require QLC and the kind of things you're talking about. So we feel good about our nodal plan in the Fab being able to supply what we need in these markets.

你說得對。 BiCS6 是當我們說存根節點時，我們不會將整個產品組合帶到 BiCS6。所以我們有一個很大的產品組合，我們正在選擇哪些產品採用 BiCS6。顯然，我們正在採用需要 QLC 的產品以及您所說的這類產品。因此，我們對工廠的節點計畫能夠滿足這些市場的需求感到滿意。

Got it. Got it. And then, Dave, on the hard drive side, I think you said in the past that you can get to 40 terabytes of the ePMR technology. I'm just kind of curious with obviously a competitor like trying to ramp up (inaudible), and it took them a while like a few years to even get the 3 terabytes per disc in R&D to fall. Can you give us an update on your HAMR road map or the status of your HAMR technology, how we think about 30, 40 terabytes plus?

知道了。知道了。然後，戴夫，在硬碟方面，我想您過去說過，您可以使用 40 TB 的 ePMR 技術。我只是對競爭對手喜歡嘗試提升（聽不清楚）感到好奇，他們花了一段時間（例如幾年）才讓研發中的每張光碟 3 TB 下降。您能否向我們介紹您的 HAMR 路線圖或 HAMR 技術的狀態的最新情況，以及我們如何看待 30、40 TB 以上？

So we've been working on HAMR for quite some time. We understand HAMR extremely well. We understand all the issues with HAMR, and what it takes to get it qualified. Clearly, we're doing that all behind the scenes, because we have a product portfolio with the best TCO we can offer in the market today, and we can do that all the way up to 40 terabytes. And 40 terabytes is where the economics flip over and you get the 4 terabyte per platter or 40 per unit, where essentially the capacity increase will cancel out the increase in costs you have to put in the unit to get the economics to work on margin, right? That's kind of a complicated -- a lot to say in one sentence.

因此，我們在 HAMR 上的研究已經有一段時間了。我們非常了解 HAMR。我們了解 HAMR 的所有問題，以及如何使其合格。顯然，這一切都是我們在幕後進行的，因為我們擁有當今市場上擁有最佳 TCO 的產品組合，我們可以做到高達 40 TB 的容量。 40 TB 是經濟性翻轉的地方，每個盤片 4 TB 或每個單元 40 TB，本質上容量的增加將抵消您必須投入到單元中的成本增加，以使經濟性發揮作用，正確的？這有點複雜——一句話可以說很多話。

But our portfolio is very focused on the right product with the right cost at the right time. The right time for HAMR is at 40 terabytes. And we've got a lot of development going on that product. We have for a long time. We, quite frankly, don't need to do it in public because we have another portfolio that's selling extremely well, which we've talked about throughout this process. But have a lot of confidence in our HAMR development. And quite frankly, our customers know exactly what we're doing, and where we're at and what our plans are, and they're comfortable with that as well.

但我們的產品組合非常注重在正確的時間以正確的成本提供正確的產品。 HAMR 的最佳時機是 40 TB。我們對該產品進行了大量開發。我們已經有很長一段時間了。坦白說，我們不需要公開這樣做，因為我們有另一個賣得非常好的投資組合，我們在整個過程中都討論過這一點。但對我們HAMR的發展充滿信心。坦白說，我們的客戶確切地知道我們在做什麼、我們處於什麼位置以及我們的計劃是什麼，他們也對此感到滿意。

And 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'm going to do one on the CFO side real quick on OpEx. So big step up in the June quarter, and you're talking about some special projects. How should we think about that progressing? Is that investments that are going to stick around for the next couple of quarters? Or should that reset back to kind of the lower base you've been running out? You've just seen OpEx move from kind of the $550 million to $660 million over the past year, obviously, revenue increasing as well, but any color there on what that investment is for and if you see a step down after that?

我將很快在財務長方面就營運支出進行一項工作。六月季度的進步如此之大，而且您正在談論一些特殊項目。我們該如何看待這項進展？這些投資會在接下來的幾季持續存在嗎？或應該重置回您已經用完的較低基數？在過去的一年裡，您剛剛看到營運支出從 5.5 億美元增加到 6.6 億美元，顯然，收入也在增加，但是這筆投資的用途有什麼不同嗎？

Yes. Sure, Tom. So let me first start by saying that the way we think of OpEx is we don't see OpEx increasing faster than revenue. So we're still very focused on that cost discipline and OpEx discipline. When it comes to this quarter, we're expecting some increase. The increase is almost 50-50 driven by variable comp as the financial outlook has improved much faster than anticipated. So there's a bit of increase there.

是的。當然，湯姆。首先我要說的是，我們對營運支出的看法是，我們認為營運支出的成長速度不會快於收入的成長速度。因此，我們仍然非常關注成本紀律和營運支出紀律。就本季而言，我們預計會有一些成長。由於財務前景的改善速度比預期快得多，因此可變補償推動了成長近 50-50。所以那裡有一點增加。

But also, as you mentioned, there's some project-specific R&D investments that also -- that we have sort of a direct correlation and line of sight to revenue. I would say for the next couple of quarters, the range that we've guided for Q4 is a reasonable range. I know it's too early to talk about fiscal year '25. But for modeling purposes, we can use the same type of numbers for now.

而且，正如您所提到的，還有一些特定於專案的研發投資——我們與收入有某種直接的相關性和視線。我想說，在接下來的幾個季度，我們為第四季度指導的範圍是一個合理的範圍。我知道現在談論 25 財年還為時過早。但出於建模目的，我們現在可以使用相同類型的數字。

Helpful. And if I look at your cost guidance for the year, a couple kind of with what you're looking at for June of '24, when I'm looking at gross margins, it seems like you need to have a pretty significant step-up in HDD gross margins. Are you planning for all of that the underutilization to come out of the model in the June quarter? And if any remains, can you let us know how much you're expecting?

有幫助。如果我看一下你們今年的成本指導，與你們所看到的 24 年 6 月的成本指導相比，當我考慮毛利率時，似乎你們需要採取一個非常重要的步驟 -硬碟毛利率上升。您是否計劃在六月季度從該模型中消除所有未充分利用的情況？如果還有剩餘，您能告訴我們您的期望值是多少嗎？

So for this most recent -- for Q3, we had a little bit -- and we disclosed, we talked about those. But as you can see, the numbers are becoming less and less significant. And so for the June quarter, there's still a little bit, but it's not really very significant for us to talk about on this call.

因此，對於最近的第三季度，我們有一些信息，我們披露了，我們討論了這些。但正如您所看到的，這些數字變得越來越不重要。因此，對於六月季度來說，還有一點，但對於我們在這次電話會議上討論的意義並不是很大。

Our next question comes from Jay Rakesh from Mizuho.

我們的下一個問題來自瑞穗的 Jay Rakesh。

David and Wissam. Just a quick question on the Flash side. Dave, when you look at the profitability, as you mentioned, how does the BiCS6 compare to -- if you look at some of the competitive NAND out there, either in terms of die size or cost per gig versus some of the peers?

大衛和維薩姆。只是一個關於 Flash 方面的簡單問題。 Dave，當您考慮盈利能力時，正如您所提到的，BiCS6 與一些具有競爭力的 NAND 相比，無論是在晶片尺寸還是每千兆成本方面與一些同行相比如何？

So that's a very complicated question. I mean we can go into it in detail offline. We obviously do tons of work, and I appreciate your question that it's a multifaceted issue. It's die size, it's memory hole density, it's all kinds of very complicated thing goes into producing a NAND product. Look, we think the product compares extremely favorable. We think it leads the market. Again, for the last -- looking back many years, we have been able to produce bits at 1/3 less CapEx than the industry average, and we expect BiCS8 to continue that leadership in the market.

所以這是一個非常複雜的問題。我的意思是我們可以離線詳細討論。顯然我們做了大量的工作，我很欣賞你的問題，因為這是一個多方面的問題。晶片尺寸、內存孔密度，以及生產 NAND 產品所需的各種非常複雜的因素。看來，我們認為產品比較優惠。我們認為它引領市場。再次強調，回顧多年，我們生產比特的資本支出比行業平均低 1/3，我們預計 BiCS8 將繼續保持市場領先地位。

So we feel very, very good about the product, about its performance. Again, when you build, this is like kind of one of the magic of wafer bonding. You can build the CMOS separately from the NAND stack and then the CMOS is kind of pristine. So the interfaces are really, really fast. So there's lots of good things about that architecture that leads to a really, really market-leading product, and we feel good about it. And we've got that all ready to go when the market conditions will support that level of investment.

所以我們對這個產品及其性能感覺非常非常好。再說一次，當你建造時，這就像晶圓鍵合的魔力之一。您可以將 CMOS 與 NAND 堆疊分開構建，然後 CMOS 就會保持原始狀態。所以這些介面真的非常非常快。因此，該架構有很多優點，可以帶來真正非常市場領先的產品，我們對此感覺很好。當市場條件支持這一投資水平時，我們已經做好了一切準備。

Our next question comes from Mehdi Hosseini from SIG.

我們的下一個問題來自 SIG 的 Mehdi Hosseini。

Yes. Most of the good questions have been asked. But David, I just have a longer-term question, and I think it will help many investors. Let's say, prices were to go sideways in '25, and you're just focusing on that 15% cost down and higher mix of higher-value eSSD products. Can you help us understand how your Flash margins would evolve from here? And then I'm not trying to ask you for pricing. But I'm just wondering how we could gauge your execution first on the product mix and be on the cost down and how they both would manifest into higher margins?

是的。大多數好問題都已被提出。但是大衛，我只是有一個更長期的問題，我認為這對許多投資者有所幫助。假設價格在 25 年橫盤整理，而您只需關注 15% 的成本下降和更高價值的 eSSD 產品的更多組合。您能否幫助我們了解您的 Flash 利潤率將如何演變？然後我並不是想問你定價。但我只是想知道我們如何首先衡量您在產品組合上的執行情況並降低成本，以及它們如何反映為更高的利潤？

Yes. Then let me first start with -- I'll take a stab at the answer, Mehdi. So look, our target model hasn't changed. We're still targeting through cycle for the flush business to be 35%, gross margin to be between 35% to 37%. And so that means, obviously, as -- from where we are today, we still have some ways to go to get to that through cycle margin. And the way we achieve these gross margins is what we've been talking about on this call. We focus on the product portfolio, the bit placement as well as on the cost side, which we still anticipate a similar type of ranges in terms of cost downs.

是的。那麼首先讓我開始——我會嘗試一下答案，邁赫迪。所以看，我們的目標模型沒有改變。我們仍將沖水業務的整個週期目標定為35%，毛利率在35%至37%之間。因此，顯然，從我們今天的情況來看，我們仍然有一些方法可以透過週期裕度來實現這一目標。我們在這次電話會議中一直在討論我們實現這些毛利率的方式。我們專注於產品組合、位元佈局以及成本方面，我們仍然預期成本下降會出現類似的範圍。

Okay. That's reasonable. Let me just move on to the second question. And this is something I always ask, focusing on HDD. Is there any update how you see exabyte shipment evolving like over the next couple of years? Is the target now 25% to 30% or less or more?

好的。這是合理的。讓我繼續討論第二個問題。這是我常問的問題，重點是硬碟。您對未來幾年 EB 出貨量的發展有何最新看法？現在的目標是 25% 到 30% 還是更少或更多？

We're not -- we're still in the 20% to 25% camp, maybe around 25%. That's -- we're clearly in a cyclical recovery here, getting back to that kind of through-cycle number. I think the kind of the question inside your question is how much does AI add on to that. And I think it's still a little early to tell. We definitely see -- as I talked about earlier, we see the value of data going up, you want to store more data to train more models. Those models are going to turn out more data. So we think that the bias is higher. I'm not in a position yet to call exactly how much it changes the slope of that line.

我們不是——我們仍然處於 20% 到 25% 陣營，也許在 25% 左右。那就是──我們顯然正處於週期性復甦，回到那種貫穿週期的數字。我認為你的問題中的問題是人工智慧對此添加了多少。我認為現在下結論還為時過早。我們確實看到——正如我之前談到的，我們看到資料的價值正在上升，你想要儲存更多的資料來訓練更多的模型。這些模型將產生更多數據。所以我們認為偏差較高。我還不能準確地指出它改變了該線的斜率有多大。

So that's something we're going to stay very focused on as we go forward here over the next several quarters, stay close to our customers as these models get deployed and AI gets more broadly deployed and adopted so that we can dial in what we expect that impact to be on HDD storage demand. But we feel good that it's -- and we've got that secular tailwind to the business that will emerge.

因此，在接下來的幾個季度中，我們將非常關注這一點，隨著這些模型的部署以及人工智慧的更廣泛部署和採用，與我們的客戶保持密切聯繫，以便我們能夠實現我們的期望這將對HDD 儲存需求產生影響。但我們對此感到很高興——而且我們已經為即將出現的業務提供了長期的順風車。

Our next question comes from Steven Fox from Fox Advisors.

我們的下一個問題來自福克斯顧問公司的史蒂文·福克斯。

Two quick ones for me. First of all, on the HDD side, your large competitors talked about having to sort of support the supply chain going forward. I was wondering what -- how you look at that option or need to do that? And then secondly, since cash flows turned positive again, I was wondering if you could sort of give us a little bit of help on how to think cash flow tracks maybe versus net income or EBITDA over the next few quarters?

對我來說兩個快點。首先，在硬碟方面，您的大型競爭對手談到必須支援未來的供應鏈。我想知道你如何看待這個選項或需要這樣做？其次，由於現金流量再次轉為正數，我想知道您是否可以給我們一些幫助，幫助我們如何思考未來幾季現金流量與淨利潤或 EBITDA 的關係？

I'll just say something about supply chain. Look, we stay -- we've stayed very close to our suppliers throughout the entire downturn and stay very close to them as we're planning the business going forward. So we think we always support our supply chain and Irving Tan, who leads operations, is based in Singapore, a lot of our suppliers are there, and he personally can stay very, very close to them. So we've stayed -- we've been very close and have supported our supply chain throughout this entire downturn. And now as things are getting better, that's a good situation for all of us. You want to talk about the cash flow?

我簡單說一下供應鏈。聽著，我們留下來了——在整個經濟低迷時期，我們一直與我們的供應商保持著非常密切的關係，並且在我們規劃未來業務時也與他們保持著非常密切的關係。因此，我們認為我們始終支持我們的供應鏈，領導營運的 Irving Tan 總部位於新加坡，我們的許多供應商都在那裡，他個人可以與他們保持非常非常密切的關係。所以我們留下來了——在整個經濟低迷時期，我們一直非常密切地支持我們的供應鏈。現在，隨著情況的好轉，這對我們所有人來說都是一個很好的情況。你想談談現金流嗎？

Yes, let me take that. So on the cash flow, yes, thanks. Obviously, we returned to free cash flow positive in Q3. And as the revenue and the business continues to recover, we're completely focused on profitability and cash flow generation. So we should expect that to improve from here.

是的，讓我接受。所以關於現金流，是的，謝謝。顯然，我們在第三季恢復了正自由現金流。隨著收入和業務的持續復甦，我們完全專注於獲利能力和現金流的產生。因此，我們應該期望情況會從現在開始有所改善。

Our next question comes from Ananda Baruah from Loop Capital.

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

Just one for me. David, really, I think, piggybacking off the part of Mehdi's question. So just a TAM question on both sides of the business, HDD and Flash, is really the spirit of it that you see some near-term demand from AI coming and TBD on the impact to the TAM over time and also TBD on impact to the normalized growth rate off of whatever the new TAM looks like? And that's really the question. And TBD is the financing, but I just wanted to make sure we get all of your current opinion there.

只給我一個。大衛，真的，我想，是順應了邁赫迪問題的一部分。因此，關於業務雙方（HDD 和快閃記憶體）的 TAM 問題確實是其精神所在，您會看到人工智慧即將到來的一些近期需求，以及隨著時間的推移對 TAM 的影響以及對 TAM 的影響的待定。不管新的TAM 是什麼樣子，標準化成長率會怎麼樣？這確實是個問題。待定的是融資，但我只是想確保我們得到你們目前的所有意見。

I think that's a fair way to say it. I think it's coming into focus as to where it's going to show up on both sides of the business, but it's -- to your point, we're not ready to call what it does to the TAM, besides, we believe, it's a tailwind to both TAMs. So clearly, on the NAND business, there's very specific use cases on model training that are coming up substantially. I mean, obviously, you're seeing that across the whole technology landscape. And maybe that's a little bit easier to see we're actually seeing demand for those kind of products in the second half.

我認為這是一個公平的說法。我認為它正在成為人們關注的焦點，它將出現在業務雙方的哪些地方，但就你的觀點而言，我們還沒有準備好向 TAM 講述它的作用，此外，我們相信，這是一個兩個TAM 的順風車。很明顯，在 NAND 業務中，模型訓練的非常具體的用例正在大量出現。我的意思是，顯然，你在整個技術領域都看到了這一點。也許更容易看出我們實際上在下半年看到了對此類產品的需求。

And for HDD, we see it as all the data that's going to feed that process is going to sit on HDDs. And obviously, once those models get trained, they're going to turn out data that's 85% plus of that is going to be stored on HDD. So we see a very, very good setup, but we're staying close to our customers in these markets. It's still a little bit early to actually put a number on it of what it does to the growth rate or the TAM size.

對於 HDD，我們將其視為將提供給該進程的所有資料都將儲存在 HDD 上。顯然，一旦這些模型經過訓練，它們將產生 85% 以上的數據，這些數據將儲存在 HDD 上。因此，我們看到了一個非常非常好的設置，但我們與這些市場的客戶保持密切聯繫。現在就實際計算它對成長率或 TAM 大小的影響還為時過早。

And our next question comes from Tristan Gerra from Baird.

我們的下一個問題來自貝爾德 (Baird) 的特里斯坦·傑拉 (Tristan Gerra)。

A quick follow-up on this, which is how critical is it to have U.S. manufacturing for SSDs in relation to AI? And how do you look at partnership with hyperscalers as opposed to more kind of a general purpose business?

快速跟進這個問題，美國的 SSD 製造對於人工智慧有多重要？您如何看待與超大規模企業的合作關係，而不是更多的通用業務？

You mean U.S. manufacturing of the NAND itself or the SSD, which -- well, our NAND is manufactured in Japan. So we don't see that as -- we feel really good about our manufacturing footprint, by the way. So the JV, we haven't talked at all on this call about the JV, but that puts us in a great position from a scale perspective and gives us -- is the big underlying part of that lowest cost bids, low capital efficiency and great product road map, because we -- all of that is done in tandem with Kioxia, and so we're able to invest as the largest supplier in the market, which is a great position to be in. But we haven't -- the way our footprint is set up for a manufacturing point of view, we haven't seen anything that impairs us ability to serve the entire market.

你指的是美國製造的 NAND 本身或 SSD，而我們的 NAND 是在日本製造的。順便說一句，我們不認為我們對我們的製造足跡感到非常滿意。因此，合資企業，我們在這次電話會議上根本沒有談論合資企業，但這從規模角度來看使我們處於有利地位，並給我們帶來了最低成本投標、低資本效率和偉大的產品路線圖，因為我們——所有這一切都是與Kioxia 合作完成的，因此我們能夠作為市場上最大的供應商進行投資，這是一個很好的位置。的足跡設定方式，我們沒有看到任何損害我們服務整個市場的能力的事情。

And as far as partnership with hyperscalers, like, look, we stay very close to the hyperscalers. Obviously, they're big customers of ours. We're big suppliers of theirs on both sides of the business. So we're very, very close to them and staying close to what are different use cases, how do they want the products built especially in the enterprise SSD market, every -- there's not just one enterprise SSD. Everybody uses slightly different interfaces and there's different ways, their architecture of their data centers are built. So we stay close to them to make sure we build the right product for what we're -- what the markets we want to serve.

就與超大規模企業的合作而言，我們與超大規模企業保持著非常密切的關係。顯然，他們是我們的大客戶。我們是他們業務雙方的大供應商。因此，我們非常非常接近他們，並密切關注不同的用例，他們希望如何特別在企業級 SSD 市場中建立產品，每一個 - 不僅僅是一種企業級 SSD。每個人都使用略有不同的介面，並且建立資料中心架構的方式也不同。因此，我們與他們保持密切聯繫，以確保我們為我們想要服務的市場打造正確的產品。

And at this time, we'll conclude today's question-and-answer session. I'd like to turn the floor back over to David for any closing remarks.

到此，我們今天的問答環節就結束了。我想把發言權交還給大衛，讓他發表結束語。

All right. Thanks, everyone. We appreciate all of the questions, and we look forward to talking to everybody throughout the quarter. Thanks again.

好的。感謝大家。我們感謝所有的問題，並期待在整個季度與每個人交談。再次感謝。

This concludes today's conference call. We thank you for joining. You may now disconnect your lines.

今天的電話會議到此結束。我們感謝您的加入。現在您可以斷開線路。