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Western Digital Urges China to Tread Carefully on Chip Ambitions

Western Digital Corp. Chief Executive Steve Milligan warned that China’s burgeoning semiconductor industry may flood global markets if the rapid growth of domestic chipmaking capacity runs unchecked.

The country’s ongoing effort to build a world-class microchip industry requires careful planning and consideration because a global glut -- a persistent concern for a largely commoditized memory sector -- benefited neither companies, the government nor the market, the executive told Bloomberg News.

China’s government is intent on spending more than $100 billion to become a leading supplier of semiconductors in coming years, to compete on an even footing with the likes of Samsung Electronics Co. or Qualcomm Inc. Semiconductors are seen by the political leadership as vital to national security, but the success of that multi-year effort comes down to accessing technology, analysts have said.

“I understand China’s desire to get into the semiconductor and memory business, I respect that...