SiliconBeat

   That most volatile of tech sector — disk drive manufacturing — got a boost when Southern California’s Western Digital told an investment conference Wednesday morning that demand for hard drives remains “strong” and pricing has remained “rational” in its current quarter so far. Better yet, factory capacity for the industry remains “constrained” and inventories are “at significantly lower levels than at the same time last year.”

These conditions — coupled, of course with what Western Digital calls its ”crisp execution and its flexible business model” — led the company to raise its guidance on sales for its fiscal 2008 second quarter to a range of $2.025 billion to $2.075 billion with earnings per share in the range of $1.02 to $1.06. The consensus estimate of analysts surveyed by Bloomberg News had expected $1.91 billion in revenue and earnings of 77 cents per share.

The company also announced it was retiring $250 million in convertible long-term debt.

The news sent Western Digital shares up more than six percent to above $30. Local storage-related stocks gained as well, with Seagate and Quantum both rising more than five percent, and Network Appliance up more than four percent.