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  "documentTitle": "Elliott Management Western Digital Letter May 2022",
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      "text": "In the six years following the SanDisk acquisition, the HDD industry rebounded and went through a critical change: Demand for high-capacity HDDs (“near-line”) from hyperscale data centers and enterprise customers accelerated. As client PC HDDs continued to decline, near-line became the dominant HDD category, and today comprises more than half of the industry. This dramatic change has led the HDD industry to become a growth market once again, and Western Digital is one of the two dominant providers of this technology.",
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      "text": "Elliott’s approach to its investments is distinguished by its intensive due diligence, and our efforts on Western Digital have followed this same approach. We enlisted former executives, industry experts, lawyers, accountants and consultants in an exhaustive research process on the Company’s strategic position and growth opportunity, as well as considerations for a Flash separation. We believe that this time- and resource-intensive diligence effort has given us a thorough understanding of Western Digital’s history and prospects. Our considerable technology-investing experience and comprehensive diligence have informed our perspective that Western Digital is deeply undervalued and that a separation of HDD and Flash is the right path forward.",
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      "text": "Over the course of five decades and multiple technological evolutions—including the transition from tape drives to HDDs and the evolving use-cases of HDDs and NAND flash memory—Western Digital has built a highly successful HDD business and earned its industry-leading role alongside Seagate Technology. But with the advent of NAND flash memory, the HDD industry began a slow decline in 2013 as desktop and notebook PCs transitioned toward NAND flash solid-state drives (SSDs), drawn by the latter’s superior speed performance. By 2015, the HDD industry was in decline. Many industry analysts predicted the eventual death of HDDs and that Flash would become the prevailing storage medium in the computing industry.",
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      "text": "With nearly $20 billion of revenue, Western Digital is one of the largest providers of storage components for data infrastructure globally. This end-market is made especially attractive by a confluence of major technology trends that are driving exponential growth in the amount of data requiring storage. Western Digital, along with a small number of competitors, serves a mission-critical role in the development and manufacturing of these products for large enterprises, hyperscale data centers, OEMs and individual consumers.",
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      "text": "Against this backdrop, Western Digital announced its acquisition of SanDisk for $19 billion in 2015 to diversify its business away from HDDs and to enter the higher-growth Flash industry. This monumental decision represented an “all-in” bet on the synergy benefits of a combined HDD/Flash portfolio—Western Digital was acquiring a $19 billion equity value company when its own market cap was only $20 billion.",
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