Analysis of Inventory
Inventory Disclosure
Western Digital Corp., balance sheet: inventory
US$ in millions
Based on: 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-07-01), 10-K (reporting date: 2021-07-02), 10-K (reporting date: 2020-07-03), 10-K (reporting date: 2019-06-28), 10-K (reporting date: 2018-06-29).
Total inventory levels exhibited a general upward trajectory from June 29, 2018, to June 30, 2023, increasing from 2,944 million US$ to 3,698 million US$. While a temporary contraction occurred in 2020, the overall trend indicates a sustained expansion of the inventory base, with the most pronounced growth occurring between 2020 and 2021.
- Raw Materials and Component Parts
- A consistent and substantial increase is observed in raw materials, which grew from 1,048 million US$ in 2018 to 2,096 million US$ in 2023. This represents a doubling of the value held in this category, with a notable acceleration in growth during the final reporting period.
- Work-in-Process
- Work-in-process inventory remained relatively stable compared to other categories, fluctuating between 878 million US$ and 1,162 million US$. After peaking in 2022, this figure decreased to 979 million US$ by June 30, 2023.
- Finished Goods
- A distinct downward trend is evident in finished goods, which declined from a peak of 1,173 million US$ in 2019 to 623 million US$ in 2023. This reduction indicates a significant decrease in the value of completed products held in stock over the analyzed period.
- Inventory Composition Shift
- The structural composition of the inventory has shifted. The proportion of total inventory held as raw materials has increased significantly, while the proportion held as finished goods has contracted. This suggests a strategic pivot toward accumulating upstream inputs rather than maintaining high levels of completed stock.
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