Western Digital and Seagate shares fell in premarket trading after Nikkei reported that Toshiba outlined a $380 million expansion that would double its AI data-center hard-drive capacity by fiscal 2027.

  • Toshiba aims to lift its HDD share by storage capacity from just over 10% to 30% over the medium term, according to Nikkei.
  • Western Digital and Seagate each hold more than 40% of the global HDD market, compared with Toshiba's 17%.
  • SSDs cost around 20 times more than HDDs, while tight memory supply is adding to hard-drive demand.

Western Digital (WDC) and Seagate Technology (STX) shares came under pressure on Friday after reports that Toshiba plans a major expansion of hard disk drive production for artificial intelligence data centers. 

According to a Nikkei Asia report, Toshiba plans to invest roughly 60 billion yen ($380 million) to double capacity by fiscal 2027. The Philippines expansion would be its first major HDD investment in about five years and would include products offering up to 40% more storage per drive.

At the time of this writing, WDC stock was down about 10%, while STX stock was trading nearly 15% lower. Both stocks were among the top trending tickers on Stocktwits. 

Toshiba Targets Bigger HDD Share

Toshiba’s share by storage capacity currently stands at just over 10%, with the company targeting 30% over the medium term, according to Nikkei. It also plans to pursue mass production of 65-terabyte-class drives in 2030 and eventually 100-terabyte-class products.

A July TrendForce report estimated Western Digital and Seagate each held more than 40% of the global HDD market, compared with roughly 17% for Toshiba.

Toshiba also plans to automate inspection and clean-room processes at its Philippines facility, which Nikkei said could reduce the additional staffing normally required for the expansion by about 40%.

AI Drives Storage Demand

AI models generate and retain enormous volumes of training data, logs, and inference output that need to be stored cost-effectively rather than accessed instantly, a role HDDs fill at a fraction of SSDs' cost per terabyte.

Nikkei said solid-state drives are roughly 20 times more expensive, while the memory supply crunch is creating additional HDD demand.

Citing IDC, the report said global annual data generation is projected to quadruple from 2024 levels to 718 zettabytes by 2030, with about 60% expected to be stored on HDDs.

What Accounts For Majority Of WDC And Seagate’s Revenues?

Western Digital is now focused on HDDs following its separation from SanDisk (SNDK). Its fiscal fourth-quarter (Q4) revenue rose 44% year over year to $3.75 billion, with cloud accounting for 89% of sales. That implies cloud revenue of roughly $3.3 billion, up about 43% from a year earlier, as demand for high-capacity enterprise drives remained strong.

Seagate’s data-center business represented 80% of fiscal 2026 revenue, up from 75% a year earlier. Nearline shipments rose to 695 exabytes from 497 exabytes, while full-year revenue climbed 34% to $12.20 billion, driven mainly by higher nearline volumes and favorable pricing.

WDC and Seagate don't break down revenue by customer segment the same way. Western Digital’s "cloud" figure is hyperscaler sales alone, while Seagate's "data center" figure also folds in enterprise and channel sales.

Seagate said in January its 2026 nearline capacity was already sold out. Western Digital, meanwhile, plans to invest $1 billion in Japan through 2030 in next-generation storage technology, talent and research partnerships, per the report.

Retail Sentiment Around WDC, STX Stocks

On Stocktwits, retail investor sentiment around WDC stock remained ‘neutral’ while sentiment surrounding STX stock was in the ‘bullish’ territory amid high message volume.

So far this year, WDC stock has surged more than 146%, while STX has soared over 228%. In comparison, iShares Future AI & Tech ETF (ARTY), which holds both stocks, has risen nearly 60% over the same period.

See Also: Broadcom Reportedly Lines Up $60B AI Chip Financing As Anthropic Expands Compute

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