The Company leases certain domestic and international facilities and datacenter space under long-term, non-cancelable operating leases that expire at various dates through fiscal year 2039. In connection with and subsequent to the separation, the Company entered into various sublease agreements with WDC under long-term, non-cancelable operating leases that expire at various dates through fiscal year 2032.

These leases include no material variable or contingent lease payments. Operating lease assets and liabilities are recognized based on the present value of the remaining lease payments discounted using the Company’s incremental borrowing rate. Operating lease assets also include prepaid lease payments minus any lease incentives. Extension or termination options present in the Company’s lease agreements are included in determining the right-of-use asset and lease liability when it is reasonably certain the Company will exercise those options. Lease expense is recognized on a straight-line basis over the lease term.


	July 3, 2026		June 27, 2025
	(in millions)
Operating lease right-of-use assets (included in Other non-current assets)	$	193	$	214

Operating lease liabilities:
Current portion of long-term operating lease liabilities (included in Accrued expenses)	24		26
Long-term operating lease liabilities (included in Other liabilities)	177		193
Total operating lease liabilities	$	201	$	219


	July 3, 2026		June 27, 2025		June 28, 2024
	(in millions)
Cost of operating leases	$	46	$	38	$	29
Cash paid for operating leases	41		33		30
Operating lease assets obtained in exchange for operating lease liabilities	12		49		167
Decrease in operating lease liabilities and right-of-use assets due to lease remeasurement	—		—		71

In September 2023, WDC completed a sale and leaseback of its facility in Milpitas, California and received net proceeds of $191 million in cash. A substantial majority of these assets are associated with the Company, and as a result, $134 million of the net proceeds from the sale-leaseback transaction were allocated to the Company on a relative square footage basis and reflected as a cash inflow from investing activities in the Consolidated Statements of Cash Flows for the year ended June 28, 2024. In connection with the sale and leaseback, the Company recorded a gain of $60 million upon the closing of the transaction which was included within Employee termination and other in the Consolidated Statements of Operations.

The property is being leased back to the Company at a total annual rate of $16 million for the first year and increasing by 3% per year thereafter through January 1, 2039. The lease includes three five-year renewal options and one four-year renewal option for the ability to extend through December 2057. The associated operating lease liability and right-of-use asset for this facility has been included in the Other liabilities and Other non-current assets in the Consolidated Balance Sheets as of July 3, 2026 and June 27, 2025.

In the normal course of business, the Company enters into purchase orders with suppliers for the purchase of components used to manufacture its products. These purchase orders generally cover forecasted component supplies needed for production during the coming months, are recorded as a liability upon receipt of the components, and generally may be changed or canceled at any time prior to shipment of the components. The Company also enters into certain long-term agreements with suppliers that contain fixed future commitments, which are contingent upon certain conditions such as performance, quality and technology of the vendor’s components.

On March 25, 2026, the Company entered into a Private Placement Subscription Agreement (the “Equity Investment Agreement”) with Nanya, pursuant to which the Company agreed to make a strategic equity investment in Nanya through a private placement of Nanya common stock (the “Transaction”).

Under the Equity Investment Agreement, the Company agreed to purchase approximately 139 million shares of Nanya common stock for an aggregate purchase price of $970 million, representing approximately 3.9% of Nanya’s outstanding common stock on a fully diluted basis following the Transaction. The purchase price reflected a 15% discount to Nanya’s 30-day average trading price, consistent with the Taiwan Securities and Exchange Act (“SEA”) and applicable regulations. The private placement was conducted pursuant to Article 43-6 of the SEA and applicable regulations and was subject to post-closing filings with the Taiwan Stock Exchange and other Taiwanese regulatory authorities. The shares issued to the Company in the private placement are subject to a statutory lock-up period of three years following delivery, during which the Company will be restricted from transferring or selling the shares, subject to limited exceptions under applicable Taiwanese law. On April 8, 2026, the Company remitted the purchase price to fully subscribe for the shares of Nanya and recognized the investment as Marketable equity securities in the Consolidated Balance Sheet. See Note 6, Fair Value Measurements and Investments for additional disclosures.

Concurrently with the Equity Investment Agreement, the Company and Nanya also entered into a multi-year strategic supply arrangement pursuant to which Nanya will supply the Company with DRAM products. The supply arrangement is intended to support the Company’s long-term DRAM sourcing strategy. The supply arrangement includes committed volumes