Data storage company Western Digital Corp. (NASDAQ: WDC) recently announced that certain material used in its manufacturing processes was contaminated. This has impacted production at its joint venture flash fabrication facilities in the Japanese cities of Kitakami and Yokkaichi.
The contamination is likely to reduce the company’s flash availability by at least 6.5 exabytes. One exabyte is equal to a billion gigabytes (GB).
Western Digital is working with computer memory manufacturer Kioxia, its local joint venture partner, to restore normal operations at the facilities as soon as possible.
About Western Digital
Based out of California, Western Digital designs, manufactures and sells data technology products, including storage devices, data center systems and cloud storage services.
Following the announcement, after the market closed on Wednesday, the company’s stock lost nearly 2% to end the day at $53.40.
Wall Street’s Take
After the announcement was made, Rosenblatt Securities analyst Kevin Cassidy maintained a Hold rating on the stock but did not provide a price target.
Cassidy said, “We expect this announcement will cause NAND Flash buyers to increase orders immediately to avoid potential shortage. Average selling prices (ASP) will likely increase. The ASP increase may help WDC offset the lost production and revenue.”
Overall, the stock has a Strong Buy consensus rating based on 9 Buys and 3 Holds. The average Western Digital price target of $72.64 implies 33.3% upside potential. Shares have lost 23.2% over the past six months.
Hedge Fund Trading Activity
TipRanks’ Hedge Fund Trading Activity tool shows that confidence in WDC is currently Positive, as the cumulative change in holdings across all 10 hedge funds that were active in the last quarter was an increase of 114,100 shares.
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