Seagate $STX Drops 15%, Western Digital $WDC 13% on Report Toshiba ...

Seagate $STX Drops 15%, Western Digital $WDC 13% on Report Toshiba Will Double HDD Production

Seagate Technology shares fell 15% and Western Digital dropped 13% after Nikkei reported Toshiba plans to significantly expand hard disk drive (HDD) production to meet rising storage demand from AI data centers. Per the report, Toshiba intends to invest roughly ¥60 billion (~$400 million) to double its HDD production capacity by fiscal year 2027, with the expansion centered on its Philippines plant.

The HDD market is currently dominated by just three players — Seagate, Western Digital, and Toshiba. Toshiba currently holds just over 10% market share by storage capacity but is targeting 30% in the medium term, raising concerns that competition in an already-concentrated market could intensify, pressuring both market share and pricing for its two larger rivals. The selloff also follows a strong run-up in both stocks this year, leaving them vulnerable to profit-taking once competitive risk resurfaced. Storage-adjacent SanDisk also fell about 3% on the news.

Not everyone agrees the threat is as large as the stock reaction suggests: Citi analyst Asiya Merchant noted that, unlike Seagate and Western Digital, Toshiba relies on external suppliers for key components like recording media and read/write heads — meaning those suppliers would also need to significantly ramp up output for Toshiba's doubling plan to fully materialize, which could limit how much new capacity actually reaches the market.