(AOF) – Hard drive manufacturer Western Digital announced that its board of directors had unanimously approved a plan to separate its traditional hard drive (HDD) and Flash memory activities. The separation is expected to be structured on a tax-free basis and is expected to occur in the second half of 2024.
“Both our HDD and Flash businesses are well positioned to take advantage of the significant dynamics in the data storage market and, as separate companies, each will have the strategic focus and resources to seize the opportunities that arise. present in their respective markets” declared CEO, David Goeckeler.
Before adding: “It is important to note that the separation of these franchises will unlock significant value for Western Digital shareholders, allowing them to participate in the rise of two industry leaders with growth profiles and separate investments.
Western Digital also announced the issuance of $1.3 billion in convertible bonds.
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New historic decline in computer sales
After having already suffered a sharp decline last year, the market is faced with demand which remains weak. Supply suffers from excess inventory, which impacts prices. According to IDC, PC sales fell by another 29% in the first quarter, falling to less than 57 million units. This is much less than the 59.2 million devices sold over the same period in 2019, before Covid. Demand is down for individuals and businesses, which have equipped themselves with the rise of teleworking. The continued rise in interest rates in the United States and Europe, and its impact on inflation, is also detrimental. Among market leaders, Lenovo, Dell and Asus posted volume declines of more than 30%. HP recorded sales down 24%. Apple faced the biggest drop, with sales collapsing by more than 40% year-on-year. The Californian group could suffer from its rather high-end positioning.