Western Digital (WDC) J.P. Morgan 54th Annual Global Technology, Media and Communications Conference summary

Industry demand and growth outlook

• Exabyte storage demand is expected to grow at over 25% CAGR for the next three to five years, driven by cloud usage, AI model training, inferencing, and physical AI applications like robotics and autonomous vehicles.

• Enterprises are increasingly retaining all data, further fueling storage needs.

• AI-generated synthetic data is supplementing real-world data to optimize algorithms, contributing to storage growth.

• Hyperscalers are signaling stronger and longer-term demand, with commitments extending to 2031 and beyond.

Customer engagement and agreements

• Customer relationships have evolved from transactional to strategic partnerships, especially with hyperscalers.

• Customers now share multi-year technology and demand roadmaps, increasing visibility and predictability.

• Long-term agreements (LTAs) with major customers extend through 2027–2029, providing volume and price frameworks but not take-or-pay commitments.

• LTAs are exabyte-based and do not specify recording technology, focusing on reliable, scalable storage.

Technology and product roadmap

• No need to add unit capacity to support 25%+ exabyte growth; technology transitions will drive higher capacity per unit.

• ePMR drives are being qualified up to 40TB (ramping in 2026), with HAMR drives up to 44TB (ramping in 2027).

• Roadmap targets 50, 60, 70, and eventually 100+ TB drives, with ongoing collaboration for customer qualification and adoption.

• UltraSMR technology, offering 20% more exabytes, is being adopted by major customers, with plans to convert most by end of 2027.