What Happened to Western Digital Corporation?
Western Digital Corporation, now operating as WD, underwent a significant transformation by spinning off its flash memory business into SanDisk Corporation in February 2025, becoming a pure-play hard disk drive (HDD) company. The company has since refocused on high-capacity HDDs for cloud and enterprise data centers, leveraging the surging demand from AI infrastructure. As of August 2026, WD reports strong financial performance and continues to innovate in HDD technology, while recurring merger talks with Kioxia face low probability of success.
Quick Answer
Western Digital Corporation successfully spun off its flash memory business into SanDisk Corporation in February 2025, transforming into a dedicated hard disk drive (HDD) manufacturer. Operating under the trade name WD, the company is now a key supplier of high-capacity storage solutions for hyperscale cloud providers and enterprise data centers, driven by the demands of artificial intelligence. WD reported strong fiscal year 2026 financial results, with significant revenue growth and expanding margins, and is actively developing next-generation HDD technologies to meet future data storage needs.
📊Key Facts
📅Complete Timeline13 events
Cyberattack Incident
Western Digital experienced a cyberattack that breached company systems, leading to the proactive taking offline of some services, including My Cloud, and an alleged exfiltration of 10 TB of data.
Plans to Separate HDD and Flash Businesses Announced
Western Digital announced its intention to separate its HDD and Flash businesses into two independent, publicly traded companies to allow for market-specific strategic focus.
Update on Company Separation
Western Digital provided an update on its separation plan, confirming it was on track for the second half of calendar year 2024, with significant progress on legal entity establishment and contract transfers.
Flash Business Spun Off as SanDisk Corporation
Western Digital successfully completed the separation of its flash memory business, which became the independent SanDisk Corporation. Western Digital remained focused on hard disk drives, and Irving Tan became its CEO.
New Logo and Trade Name 'WD' Introduced
Western Digital introduced a new logo and began trading under the name WD, while retaining Western Digital Corporation as its legal corporate name, signifying its renewed focus as an HDD pure-play.
Innovation Day 2026: AI Storage Roadmap
At its Innovation Day, WD unveiled a new customer-centric storage roadmap, emphasizing its role as a strategic storage infrastructure partner for the AI-driven data economy and detailing plans for 40TB UltraSMR HDDs and a path to 100TB HAMR drives by 2029.
Volume Shipments of 40TB UltraSMR Drives Begin
WD began volume shipments of its 40TB drives, utilizing proprietary UltraSMR technology, to hyperscale cloud providers, solidifying its position in high-capacity storage for AI.
Reports Fiscal Third Quarter 2026 Financial Results
WD reported strong Q3 FY26 results, with revenue up 45% year-over-year to $3.34 billion and GAAP gross margin exceeding 50%, driven by demand across all end markets.
Manuvir Das Appointed to Board of Directors
WD announced the appointment of Manuvir Das, a veteran technology executive and AI infrastructure leader, to its Board of Directors, bringing expertise in enterprise AI and cloud computing.
Kioxia Merger Talks Reportedly Reopen
Reports indicated that Western Digital and Kioxia had reopened merger talks, focusing on combining their NAND flash memory businesses to create a larger, more competitive player.
Reports Fiscal Fourth Quarter and Full Year 2026 Financial Results
WD announced robust Q4 and full fiscal year 2026 results, with Q4 revenue up 44% year-over-year to $3.75 billion and full-year revenue reaching $12.92 billion, highlighting strong performance and increased demand.
Low Probability for Kioxia Merger Success
Analysis suggested a low probability for the success of the renewed Kioxia merger talks, citing Bain Capital's exit from Kioxia and SK Hynix's continued opposition as major obstacles.
New AI Data Infrastructure Lab with Tohoku University
Western Digital deepened its AI and data storage credentials by establishing a new AI Data Infrastructure Lab with Tohoku University, focusing on research into next-generation recording materials.
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🔍Deep Dive Analysis
Western Digital Corporation, a long-standing leader in data storage, has undergone a profound strategic transformation in the mid-2020s, fundamentally reshaping its business model. The most significant turning point was the successful spin-off of its flash memory business into an independent public entity, SanDisk Corporation, on February 24, 2025. This move effectively reversed its 2016 acquisition of SanDisk and allowed Western Digital, now primarily operating as WD, to become a pure-play hard disk drive (HDD) company.
The rationale behind this separation, which had been under discussion since late 2023, was to allow each business to pursue market-specific strategies, optimize capital structures, and enhance shareholder value. Post-spin-off, Irving Tan assumed the role of CEO for Western Digital, while former CEO David Goeckeler transitioned to lead the newly independent SanDisk Corporation.
Since the separation, WD has strategically pivoted to focus on the burgeoning demand for high-capacity storage from hyperscale cloud providers and enterprise data centers, positioning itself as a critical infrastructure provider for the artificial intelligence (AI) era. The company's business model now emphasizes a "Volume and Value" strategy within the HDD market, with a focus on "Massive Capacity" storage and long-term agreements with customers. Innovation is centered on advanced recording technologies like ePMR (energy-assisted Perpendicular Magnetic Recording) and HAMR (Heat-Assisted Magnetic Recording), with 40TB UltraSMR drives shipping in early 2026 and a roadmap aiming for 100TB HAMR drives by 2029.
Financially, WD has demonstrated strong performance following the split. For fiscal year 2026 (ended July 3, 2026), the company reported revenue of $12.92 billion, a 36% increase over FY2025. Q4 FY2026 revenue was $3.75 billion, up 44% year-over-year, with GAAP gross margin expanding to 54.1% and diluted EPS more than doubling. The company's HDD production capacity for 2026 is reportedly sold out, with contracts extending through 2028, indicating robust demand.
Despite the strategic separation, discussions around a potential merger with Kioxia, a Japanese memory specialist, have repeatedly resurfaced. Talks reportedly reopened in July 2026, driven by the potential to create a larger, more competitive storage company in the NAND market. However, the probability of a successful merger is currently considered low, primarily due to Bain Capital's divestment from Kioxia by early July 2026 and the continued opposition from SK Hynix, a significant Kioxia shareholder. Kioxia itself has shown signs of pursuing independent development, including a share buyback plan and plans for an independent overseas listing.
What If...?
Explore alternate histories. What if Western Digital Corporation made different choices?