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SOLID RETURN TO PROFITABILITY IN HARD DRIVE BUSINESS HIGHLIGHTS WESTERN DIGITAL SECOND QUARTER RESULTS

Core HDD Business Posts Sequential, Year-Over-Year Revenue Growth & Gross
Margin Improvement, $10.2 Million Operating Profit Before Extraordinary
Gains

Western Digital Corporation today reported revenue of $530.7 million and
net
income of $1.8 million, or $.01 per share, for its second quarter ended
December 29, 2000--including a $10.2 million operating profit in its hard
drive business and a 21 percent sequential growth in total revenue from
its
fiscal first quarter. The consolidated Q2 results include an extraordinary
gain of $10.6 million relating to bond redemptions. Excluding the
extraordinary gain, the Company would have had a net loss of $8.8 million,
or $.05 per share.

The strong operating performance of Western Digital's Hard Drive Solutions
business reverses a string of 11 consecutive quarters of operating losses.
In the year earlier period, Western Digital reported total revenue of
$560.2
million, including $42.9 million for sales of enterprise class drives - a
product line that was discontinued in January 2000. On a year-over-year
basis, the Company's desktop hard drive business saw revenue grow from
$517
million in Q2 fiscal 2000 to $531 million in Q2 fiscal 2001. In the first
quarter of fiscal 2001, consolidated revenue totalled $440 million, almost
all of it from desktop drives.

The net loss in the year earlier period was $15.2 million, or $.13 per
share, and included an extraordinary gain of $76.3 million for bond
redemptions and restructuring charges of $25.5 million, primarily related
to
the closure of a manufacturing facility in Singapore. Excluding the
extraordinary gain and restructuring charges, the net loss would have been
$66.0 million, or $.54 per share.

Matt Massengill, president and chief executive officer of Western Digital,
said: "Solid profitability and revenue growth in our hard drive business
show that we have achieved much of what we set out to do a year ago.
Western
Digital has returned to the desktop HDD industry's leadership position for
both time-to-market and time-to-volume in the 5400 and 7200 RPM platforms,
enabling us to achieve a richer product mix. The hard drive business is
generating cash; we have expanded gross margins to desktop industry
competitive levels; and our flexibility in managing the fast-changing
dynamics of our customer and component supply base has earned us primary
supplier status at many of the major PC OEMs. The prevailing conditions in
our industry favour the players who are executing, flexible, and focused."

Western Digital shipped more than 5.8 million hard drives in the second
quarter-up 14 percent from 5.1 million units in the first fiscal quarter
and
from the 5.1 million desktop units shipped in the year ago quarter. The 20
GB-per- platter family of drives accounted for approximately 76 percent of
units shipped in Q2, reflecting WD's first-to-market and first-to-volume
achievement with its 20 gigabyte 7200 RPM drive in the first quarter.
Nearly
40 percent of Q2 units shipped were 7200 RPM drives. Last week, the
Company
announced it is in volume production of the new WD CaviarTM 5400 RPM, 30
GB-per-platter model - another industry first.

Massengill noted that the second quarter results included operating losses
totalling $19.4 million for the Company's new business ventures, and that
the Company is continuing to focus its efforts on reducing those losses
throughout the calendar year.

For the six months ended December 29, 2000, revenue was $970.9 million and
the net loss was $31.7 million, or $.20 per share, including extraordinary
gains of $21.8 million. This compares with year-earlier revenues of $967.1
million, including $124.3 million for sales of subsequently discontinued
enterprise class drives, and a net loss of $121.5 million, or $1.12 per
share, including extraordinary gains of $166.9 million and non-recurring
charges of $95.5 million.

About Western Digital

Western Digital, one of the storage industry's long-time leaders, provides
products and services for people and organizations that collect, manage
and
use digital information. Our core business, Hard Drive Solutions, produces
reliable, high-performance hard drives that enable users to keep data
close-at-hand and secure from loss.

Western Digital's new ventures meet the increasing demand for innovative
information management solutions arising from the growth of the Internet
and
broadband services. Keen Personal Media provides interactive broadband
Personal Video Recorder and set-top box software, services and hardware
for
television content management. Connex designs Network Attached Storage
products that enable IT managers to quickly expand network storage, and
software that simplifies the central management of Storage Area Networks.
SageTree is a software company providing enterprise manufacturing and
supply
chain analytic applications.



Western Digital was founded in 1970. The Company's storage products are
marketed to leading systems manufacturers and selected resellers under the
Western Digital brand name. Visit the Investor section of our Web site to
access a variety of financial and investor information.
www.westerndigital.com

This release contains forward-looking statements, including statements
relating to reduction of losses from the Company's new business ventures,
component shortages and pricing, improving gross profit margin and product
mix. The forward-looking statements are based on current management
expectations, and actual results may differ materially as a result of
several factors, including: market acceptance for the Company's products
and
the products and services of the Company's new business ventures; the
Company's ability to execute future production ramps and utilize
manufacturing assets efficiently; availability of hard drive components;
changes in product and customer mix; pricing trends; actions by
competitors;
successful entry into new markets by the Company and its subsidiaries; and
other factors discussed in the Company's recent SEC filings. The Company
undertakes no obligation to update forward-looking statements to reflect
events or circumstances occurring after the date of such statements.


Western Digital and WD Caviar are registered trademarks. Keen Personal
Media
is a trademark of Keen Personal Media, Inc. Connex is a trademark of
Connex,
Inc. SageTree is a trademark of SageTree, Inc. All other brand and product
names mentioned herein are the property of their respective companies.]

Editorial Contacts:

Paul Calderwood

Western Digital Europe

Tel: 020 8763 2241

Fax: 020 8763 2245

Email: kingswoodmktg@btinternet.com


Nick Barrance, Emma Gurd

Bluegrass Communications

Tel: 01264 323141

Fax: 01264 323251

Email: nick.barrance@bluegrass.co.uk


Use the link below to view the 'consolidated statements of operations' and
'consolidated balance sheets'

http://www.westerndigital.com/company/releases/20010125.html