A Toshiba factory plan took a tenth off Seagate and Western Digital

Seagate closed at US$848.99 on Friday, down 10.21%, and Western Digital fell 10.22% to US$415.29. Even after that, Seagate is up more than 200% this year and Western Digital more than 140%.

Toshiba is spending modestly and aiming high. Nikkei reported that Toshiba will spend about ¥60 billion, roughly US$400 million, to double its hard drive output by its 2027 financial year. It holds just over 10% of the market by capacity and wants 30%.

AI data centres want every hard drive the three makers can build. Seagate and Western Digital have both said their 2026 output is sold out. That scarcity has let them push prices up.

Chart: Seagate's revenue is back near its 2022 level. Its market value rose from US$14.8bn to US$185.6bn. Revenue by financial year to June or July (columns, left scale) and market value at each year end (line, right scale), US$bn, on two scales from zero. The line ends in July, before Friday's fall. — This story’s chart of the day: the numbers, the dark version and the animated version are on its own page. The chart’s page →

Citi's Asiya Merchant thinks the market may be overstating the threat. Toshiba buys the read heads and the disks from outside suppliers, and those suppliers would need to expand as well.

Food for thought

these two shares were priced for hard drives staying scarce for years. A third maker adding capacity is the first real test of that, and the next results from each will show whether 2027 contract prices are holding.

This story ran in Good Bad News Saturday 3 October’s edition, with the market snapshot, the other two stories, the numbers and the week ahead. Read the whole edition →

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