Question-and-Answer Session
Operator
(Operator Instructions) Our first question comes from Richard Kugele with Needham & Company.
Richard Kugele - Needham & Company
A couple of questions, I guess first obviously on the CapEx side, can you talk about just from an industry perspective how linearly you can add the capacity as you see the demand situation unfold in 2010? I think that that’s one of the areas that is of primary concern to investors, just to make sure the industry doesn’t over-expand but at the same time can adjust to upside as it sees it. Any color on that?
John F. Coyne
I think we need to bear in mind the background in the industry. Essentially since calendar Q4 of ’07, the industry has had an installed demonstrated capacity in excess of 155 million units per quarter. Since that time, on a quarterly basis, I think the industry has reacted very well to the actual demand in the marketplace and adjusted utilization of installed capacity to address demand as demand emerged, particularly so since Q4 of ’08 and through the first couple of quarters of this calendar year.
So I think the concerns about installed capacity are a little overblown.
Secondly, from a Western Digital perspective, we have been adding capacity on a just-in-time basis to address real demand from our customers as it has emerged. We, as Tim mentioned, our 44.1 million units last quarter was a record for the company, an all-time record for the company. We continue to see strong demand from our customers. We continue to be very encouraged by the demonstration through the last six months in terms of the recovery of demand once an inventory adjustment had been made, says to me that that PCs and the ability to store and distribute digitized content is becoming a necessity to today’s lifestyle rather than an extra. And so I believe there is very strong underlying demand that will continue.
As we look at the -- we don’t know what the industry plans are for investment going forward. When we look at Western Digital CapEx plans, our investments in heads and media tend to be on a six to 12-month outbound decision-making, so that we need to decide now what we think the market is going to look like a year from now in terms of our investments in our wafer fab and our slider fab from a head perspective, and in our media substrate and sputtering operations.
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