The AI boom has created an unexpected comeback story for one of technology’s oldest products: the hard drive. But as demand for high-capacity storage surges, the three companies still making hard disk drives (HDDs) — Seagate Technology Holdings PLC (NASDAQ:STX), Western Digital Corp (NASDAQ:WDC) and Toshiba — are moving in very different directions.
Toshiba is Trying to Take Back Market Share
Toshiba is putting roughly $380 million into its Philippine operations to nearly double HDD production capacity for AI data centers by fiscal 2027. The Japan-based company wants to lift its share of the HDD market by storage capacity from just over 10% toward 30% over time, according to reports. It also plans higher-capacity drives, including 65TB-class products around 2030 and eventually 100TB models.
That announcement initially looked like a direct threat to Seagate and Western Digital. Both stocks plunged roughly 10% on Friday as investors worried that additional supply could weaken the scarcity that has helped drive their enormous 2026 gains.
But Wall Street quickly pushed back. Morgan Stanley argued that the additional Toshiba capacity would still leave the HDD market undersupplied through 2028, while TD Cowen estimated the expansion could add about 75 exabytes against a roughly 300-exabyte supply shortage.
Seagate Defends its Technology Lead
Seagate has been pushing heat-assisted magnetic recording, or HAMR, as its route to much higher capacities. Its Mozaic platform now supports drives up to 44TB, with the Fremont, California-based company targeting a path toward 100TB drives.
Seagate says two leading hyperscalers have already qualified its latest platform for production-scale deployments.
Western Digital Pursues its Own High-Capacity Roadmap
Western Digital has a 40TB UltraSMR drive in customer qualification and says its HAMR roadmap is designed to reach 100TB and beyond.
The San Jose, California-based company is also developing performance and power-efficiency technologies specifically for AI-scale workloads.
That makes Toshiba’s expansion more complicated than simply adding cheap capacity. It has to compete on the technology needed to pack substantially more data into each drive.
The TDK Twist
Then comes the more intriguing development: Seagate and Toshiba are reportedly competing to acquire TDK’s HDD magnetic-head business, potentially in a deal worth several billion dollars. TDK supplies magnetic heads to all three major HDD makers, making the asset strategically important to the entire industry. TDK itself said it has not made a final decision.
That turns the AI storage boom into a broader battle over the supply chain.
For investors, the key question is which company can capture the economics of that demand as supply expands. The TDK contest could reveal which player wants the most control over the next phase of the AI storage boom.
Photo: Pete Hansen / Shutterstock – ek
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