Western Digital® Corp. (NASDAQ: WDC) indicated today that it has successfully resolved two non-compliance matters with China’s Ministry of Commerce (“MOFCOM”) as part of its ongoing and constructive dialogue with the agency regarding the hold separate restriction associated with WDC’s acquisition of HGST in March 2012. The company said that these steps represent significant progress in its relationship with MOFCOM and that, while it cannot predict whether or when the agency will lift the hold separate condition, MOFCOM has indicated to the company that it is now fully focused on considering Western Digital’s application to lift the restriction. MOFCOM continues to express overall satisfaction with the company’s efforts to comply with its hold separate remedy. WDC continues to believe a lift of the condition best serves the interests of the company, the industry, the Chinese economy and consumers worldwide.
The company is fully complying with resolutions associated with these matters, which relate to: (1) the organization of a WDC department that included several former HGST employees, and (2) the re-alignment of the ownership structure of an indirect subsidiary of WDC. To implement these resolutions, the company will pay a penalty of 600,000 RMB (approximately $100,000 USD in total), conduct an immaterial reorganization of the department in question, and make certain modifications to its subsidiary structure that will be neutral and non-material from a tax and financial standpoint.
About Western Digital
Founded in 1970, Western Digital Corp. (NASDAQ: WDC), Irvine, Calif., is an industry-leading developer and manufacturer of storage solutions that enable people to create, manage, experience and preserve digital content. Its HGST and WD® subsidiaries are long-time innovators in the storage industry. Western Digital Corporation is responding to changing market needs by providing a full portfolio of compelling, high-quality storage products with effective technology deployment, high efficiency, flexibility and speed. Our products are marketed under the HGST, WD and G-Technology™ brands to OEMs, distributors, resellers, cloud infrastructure providers and consumers. Financial and investor information is available on the company’s Investor Relations website at investor.wdc.com.
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 concerning the hold separate restrictions and the implementation of the MOFCOM resolutions. These forward-looking statements are based on management’s current expectations and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the forward-looking statements, including the impact of continued uncertainty and volatility in global economic conditions; supply and demand conditions in the hard drive industry; uncertainties concerning the availability and cost of commodity materials and specialized product components; actions by competitors; unexpected advances in competing technologies; uncertainties related to the development and introduction of products based on new technologies and expansion into new data storage markets; business conditions and growth in the various hard drive markets; pricing trends and fluctuations in average selling prices; and other risks and uncertainties listed in the company’s filings with the Securities and Exchange Commission (the “SEC”), including the company’s Form 10-Q filed with the SEC on Nov. 4, 2014, to which your attention is directed. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof, and the company undertakes no obligation to update these forward-looking statements to reflect subsequent events or circumstances.
Western Digital, WD and the WD logo are registered trademarks in the U.S. and other countries. HGST trademarks are intended and authorized for use only in countries and jurisdictions in which HGST has obtained the rights to use, market and advertise the brand. Other marks may be mentioned herein that belong to other companies.