Western Digital Settles With IRS Over ‘Long-Running Tax Matter’

Western Digital reached a tentative settlement with the IRS to resolve “a long-running tax matter” involving the fiscal years 2008 through 2015, said CEO David Goeckeler on an earnings call Thursday for fiscal Q3 ended April 1. The settlement is expected to result in a “previously unforecasted” cash payment to the government of between $500 million and $600 million during the fiscal year ending July 2023, he said. WD’s consumer business is experiencing “short-term demand weakness” outside the U.S. tied to the “geopolitical events in Europe,” plus the COVID-19 lockdowns in China, Goeckeler said. “However, we are confident in the strength of the business as we are entering a seasonally stronger second half of the calendar year with a number of new innovative products.” In mobile, WD has a “strong position in 5G phones,” he said. “We see demand for the latest 5G flagship phones remaining solid, with NAND content doubling from prior-generation smartphones.” Demand from gaming and virtual- and augmented-reality devices “remains robust,” he said. Industry analysts expect VR headset sales to rise at a 47% compound annual growth rate “over the next couple of years.” he said.