Western Digital (WDC) risk factors, 2025 10-K

OPERATIONAL RISKS

1. 01Adverse global or regional conditions could harm our business
2. 02Changes in U.S. trade policy and the impact of tariffs and retaliatory actions may have a material adverse effect on our business and results of operations
3. 03We are dependent on a limited number of qualified suppliers who provide critical services, materials or components, and a disruption in our supply chain could negatively affect our business
4. 04Our operations, and those of certain of our suppliers and customers, are subject to substantial risk of damage or disruption
5. 05The loss of our key management, staff and skilled employees or the inability to hire and develop new employees could negatively impact our business prospects
6. 06The compromise, damage or interruption of our technology infrastructure, information systems or products by cybersecurity incidents, data security breaches, other security problems, design defects, information system failures or other events could have a material negative impact on our business
7. 07adversarial attacks, which could result in unauthorized access to or leakage of sensitive information. Geopolitical tensions or conflicts may also create heightened risk of cybersecurity incidents
8. 08We are subject to risks related to product defects, which could result in product recalls or epidemic failures and could subject us to warranty, litigation or indemnification claims that exceed our expectations or estimates

BUSINESS AND STRATEGIC RISKS

1. 09We are subject to risks related to the separation of Sandisk, our former Flash business, into an independent public company
2. 10and other counterparties. In addition, following the Separation, we are a smaller and less diversified company, which could make us more vulnerable to changing market conditions
3. 11If we do not properly manage technology transitions and product development and introduction, our competitiveness and operating results may be negatively affected
4. 12We participate in a highly competitive industry that is subject to variations in average selling prices (“ASPs”) and demand, technological change and lengthy product qualifications, all of which can negatively impact our business
5. 13Loss of revenue from the Cloud end market or a key customer, or consolidation among our customer base, could harm our operating results
6. 14We experience variability in our sales and cyclicality in our industry, which could cause our operating results to fluctuate. In addition, accurately forecasting demand is difficult, which could harm our business
7. 15Failure to successfully execute on strategic initiatives including acquisitions, divestitures or cost saving measures may negatively impact our future results
8. 16Our strategic relationships subject us to risks and uncertainties that could harm our business
9. 17Our control over the operations of our business ventures may be limited, and our interests could diverge from our strategic partners’ interests regarding ongoing and future activities

FINANCIAL RISKS

1. 18Our level of debt may negatively impact our liquidity, restrict our operations and ability to respond to business opportunities, and increase our vulnerability to adverse economic and industry conditions
2. 19Tax matters may materially affect our financial position and results of operations
3. 20Any decisions to reduce or discontinue paying cash dividends to our stockholders or the repurchase of our shares of common stock pursuant to our previously announced share repurchase program could cause the market price for our common stock to decline
4. 21Fluctuations in currency exchange rates as a result of our international operations may negatively affect our operating results
5. 22Increases in our customers’ credit risk could result in credit losses and term extensions under existing contracts with customers with credit losses could result in an increase in our operating costs

LEGAL AND COMPLIANCE RISKS

1. 23We and certain of our officers are and may continue to be involved in litigation, investigations and governmental proceedings, which may be costly, may divert the efforts of our key personnel and could result in adverse court rulings, fines or penalties, which could materially harm our business
2. 24The nature of our industry and its reliance on IP and other proprietary information subjects us and our suppliers, customers and partners to the risk of significant litigation
3. 25Our reliance on IP and other proprietary information subjects us to the risk that these key components of our business could be copied by competitors
4. 26Our aspirations, disclosures and actions related to environmental, social and governance (“ESG”) matters expose us to risks that could adversely affect our reputation and performance
5. 27The exclusive forum provisions in our Bylaws could limit our stockholders’ ability to bring a claim in a judicial forum that it finds favorable for disputes with the Company or its directors, officers or other employees