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Related Parties and Related Commitments and Contingencies (Tables)

3 Months Ended

Oct. 03, 2025

Commitments and Contingencies Disclosure [Abstract]

The following table presents the notes receivable from, and equity investments in, Flash Ventures for the periods presented:


	October 3, 2025		June 27, 2025
	(in millions)
Notes receivable, Flash Partners	$	6	$	7
Notes receivable, Flash Alliance	39		36
Notes receivable, Flash Forward	296		316
Investment in Flash Partners	39		55
Investment in Flash Alliance	112		115
Investment in Flash Forward	110		125
Total notes receivable and investments in Flash Ventures	$	602	$	654

The following presents Interest expense and Interest income on notes due to (from) Western Digital Corporation, which were recorded within Interest expense and Interest income in the Condensed Consolidated Statements of Operations for the periods presented:


	Three Months Ended
	October 3, 2025		September 27, 2024
	(in millions)
Interest income on notes due from Western Digital Corporation	$	—	$	(1)
Interest expense on notes due to Western Digital Corporation	$	—	$	2

The table below summarizes the impact of expense allocations from WDC within the Condensed Consolidated Statements of Operations for the periods presented:


	Three Months Ended
	October 3, 2025		September 27, 2024
	(in millions)
Research and development	$	—	$	187
Selling general, and administrative	—		113
Business separation costs	—		2
Employee termination and other charges	—		20
Total allocation of Corporate Expenses	$	—	$	322

A reconciliation of Net transfers from (to) Western Digital Corporation on the Condensed Consolidated Statements of Shareholders’ Equity to the corresponding amounts on the Condensed Consolidated Statements of Cash Flows is as follows:


	Three Months Ended
	October 3, 2025		September 27, 2024
	(in millions)
Net transfers from Western Digital Corporation per Condensed Consolidated Statements of Shareholders’ Equity	$	—	$	583
Notes due to Western Digital Corporation	—		(378)
Other assets and liabilities, net transferred from Western Digital Corporation	—		(6)

Property, plant and equipment, net transferred from Western Digital Corporation	—		(3)
Tax balances transferred from Western Digital Corporation	—		(7)


Net transfers to Western Digital Corporation per Condensed Consolidated Statements of Cash Flows	$	—	$	189

Schedule of Variable Interest Entities

The Company’s maximum reasonably estimable loss exposure (excluding lost profits) as a result of its involvement with Flash Ventures, based upon the Japanese yen to U.S. dollar exchange rate at October 3, 2025, is presented below. Investments in Flash Ventures are denominated in Japanese yen, and the maximum estimable loss exposure excludes any cumulative translation adjustment due to revaluation from the Japanese yen to the U.S. dollar.


	October 3, 2025
	(in millions)
Notes receivable	$	341
Equity investments	261
Operating lease guarantees	1,219
Inventory and prepayments	1,273
Maximum estimable loss exposure	$	3,094

Schedule of Guarantor Obligations

The following table presents the Company’s portion of the remaining guarantee obligations under the Flash Ventures’ lease facilities in both Japanese yen and U.S. dollar-equivalent, based upon the Japanese yen to U.S. dollar exchange rate as of October 3, 2025:


	Lease Amounts
	(Japanese yen, in billions)		(U.S. dollar, in millions)
Total guarantee obligations	¥	180	$	1,219

The following table details the breakdown of the Company’s remaining guarantee obligations between the principal amortization and the purchase option exercise price at the end of the term of the Flash Ventures lease agreements, in annual installments, in U.S. dollars, based upon the Japanese yen to U.S. dollar exchange rate as of October 3, 2025:


Annual Installments	Payment of Principal Amortization		Purchase Option Exercise Price at Final Lease Terms		Guarantee Amount
	(in millions)

2026	297		70		367
2027	274		104		378
2028	138		100		238
2029	58		54		112
2030	25		62		87
2031	2		35		37
Total guarantee obligations	$	794	$	425	$	1,219

- Definition

Tabular disclosure of the significant judgments and assumptions made in determining whether a variable interest (as defined) held by the entity requires the variable interest entity (VIE) (as defined) to be consolidated and (or) disclose information about its involvement with the VIE, individually or in aggregate (as applicable); the nature of restrictions, if any, on the consolidated VIE's assets and on the settlement of its liabilities reported by an entity in its statement of financial position, including the carrying amounts of such assets and liabilities; the nature of, and changes in, the risks associated with involvement in the VIE; how involvement with the VIE affects the entity's financial position, financial performance, and cash flows; the lack of recourse if creditors (or beneficial interest holders) of the consolidated VIE have no recourse to the general credit of the primary beneficiary (if applicable); the terms of arrangements, giving consideration to both explicit arrangements and implicit variable interests, if any, that could require the entity to provide financial support to the VIE, including events or circumstances that could expose the entity to a loss; the methodology used by the entity for determining whether or not it is the primary beneficiary of the variable interest entity; the significant factors considered and judgments made in determining that the power to direct the activities of a VIE that most significantly impact the VIE's economic performance are shared (as defined); the carrying amounts and classification of assets and liabilities of the VIE included in the statement of financial position; the entity's maximum exposure to loss, if any, as a result of its involvement with the VIE, including how the maximum exposure is determined and significant sources of the entity's exposure to the VIE; a comparison of the carrying amounts of the assets and liabilities and the entity's maximum exposure to loss; information about any liquidity arrangements, guarantees, and (or) other commitments by third parties that may affect the fair value or risk of the entity's variable interest in the VIE; whether or not the entity has provided financial support or other support (explicitly or implicitly) to the VIE that it was not previously contractually required to provide or whether the entity intends to provide that support, including the type and amount of the support and the primary reasons for providing the support; and supplemental information the entity determines necessary to provide.

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