On April 23, 2024, the Company entered into an Asset Purchase Agreement with Avago Technologies International Sales Pte. Limited to sell certain intellectual property, equipment and other assets related to the design, development and manufacture of its SoC products to Purchaser for $600 million.

During the March 2024 quarter, we experienced ongoing recovery within the cloud market, reflecting continued progress in customer inventory adjustments which we believe are now mostly complete, along with an improvement in end-market demand.

During the third quarter of fiscal year 2024, the Company established Singapore as its principal executive offices.

We continued to execute cost discipline and implement pricing actions to improve operational efficiency and profitability.

Effective from the first quarter of fiscal year 2024, the Company changed the useful lives of certain manufacturing equipment from a range of three to seven years to a range of three to ten years based on its review of technology product roadmap.

During the nine months ended March 29, 2024, we made cash payments of $115 million related to the workforce reduction costs under the restructuring plans.

We face increasing scrutiny related to environmental, social and governance activities. We risk damage to our reputation if we fail to act responsibly in a number of areas, such as diversity and inclusion, environmental stewardship, sustainability, supply chain management, climate change, the usage of AI, workplace conduct and human rights.

We anticipate that these threats will continue to grow in scope and complexity over time due to the development and deployment of increasingly advanced tools and techniques.

The Company is involved in various legal proceedings, including patent infringement actions and securities litigation. These proceedings could result in substantial costs, damages, and injunctions, which could materially harm the Company's business, results of operations, and financial condition.

We face intense competition in the data storage industry. Our principal sources of competition include HDD and SSD manufacturers, and companies that provide storage subsystems, including electronic manufacturing services and contract electronic manufacturing.

Further adoption of SSDs or other alternative storage technologies may limit our total addressable HDD market, impact the competitiveness of our product portfolio and reduce our market share.

Furthermore, to the extent that there is consolidation among our customer base, or when supply exceeds demand in our industry, our customers may be able to command increased leverage in negotiating prices and other terms of sale, causing price erosion, which could adversely affect our profitability.

Gross margin for the March 2024 quarter increased compared to the December 2023 quarter, primarily driven by favorable pricing actions undertaken by the Company and, to a lesser extent, favorable product mix, partially offset by a $7 million increase in factory underutilization charges due to the transition of some production lines to new products.

Shortages or delays in the receipt of, or cost increases in, critical components, equipment or raw materials necessary to manufacture our products, as well as reliance on single-source suppliers, may affect our production and development of products and may harm our operating results.

We continually seek to make our cost structure and business processes more efficient. We are focused on increasing workforce flexibility and scalability, and improving overall competitiveness by leveraging our global capabilities, as well as external talent and skills, worldwide.

As part of our launch of the Mozaic hard drive platform, we are transitioning to key areal density recording technologies that use HAMR technology to increase HDD capacities. If our transitions to more advanced technologies, including the transition to HDDs utilizing HAMR technology, require development and production cycles that are longer than anticipated or if we otherwise fail to implement new HDD technologies successfully, we may lose sales and market share, which could significantly harm our financial results.

Our business and certain products and services depend in part on intellectual property and technology licensed from third parties, as well as data centers and infrastructure operated by third parties.

Growing demand for data storage caused by the increasing use of artificial intelligence (“AI”) technologies.

On April 23, 2024, the Board of Directors of the Company declared a quarterly cash dividend of $0.70 per share, which will be payable on July 5, 2024 to shareholders of record as of the close of business on June 20, 2024.

Our previously announced share repurchase program was paused in the December 2022 quarter, remained paused through the third quarter of fiscal year 2024 and there are no assurances as to if and when the program will resume.

For fiscal year 2024, we expect capital expenditures to be lower than fiscal year 2023.

We face increasing scrutiny related to environmental, social and governance activities. We risk damage to our reputation if we fail to act responsibly in a number of areas, such as diversity and inclusion, environmental stewardship, sustainability, supply chain management, climate change, the usage of AI, workplace conduct and human rights.

The impact of climate change may increase these risks due to changes in weather patterns, such as increases in storm intensity, sea-level rise and temperature extremes in areas where we or our suppliers and customers conduct business.

The Company has established environmental management systems and continually updates its environmental policies and standard operating procedures for its operations worldwide.

During the March 2024 quarter, we experienced ongoing recovery within the cloud market, reflecting continued progress in customer inventory adjustments which we believe are now mostly complete, along with an improvement in end-market demand.

We believe that we are in the early stage of an industry-wide demand recovery, however we expect the macroeconomic environment to remain dynamic and continue to impact our business and results of operations.

Geopolitical uncertainty, terrorism, instability or war, such as the military action against Ukraine launched by Russia and the latest developments in the Middle East conflict, natural disasters, public health issues and other business interruptions have caused and could cause damage or disruption to international commerce and the global economy, and thus could have a strong negative effect on our business.