Seagate Drops 13% and Western Digital Falls 12% After Toshiba Plans to Double Hard-Drive Output for AI Data Centers

Seagate Technology and Western Digital shares cratered Friday after Nikkei reported that Toshiba plans to invest roughly 60 billion yen, equivalent to approximately $380 million, to double its hard disk drive production capacity by fiscal year 2027. The expansion centers on Toshiba's Philippines manufacturing plant and targets drives of 65 terabytes by 2030, with an eventual goal of reaching 100TB. Seagate traded down as much as 13% to $825.47 intraday before closing roughly 10% lower, while Western Digital fell as much as 12% to $405.23 before finishing down in a similar range.

The selloff reflects investor concern that Toshiba's capacity push will erode the strong pricing power that Seagate and Western Digital have enjoyed as AI data-center operators turn to HDDs to manage storage costs. SSDs currently cost roughly 20 times more than HDDs, a gap that has driven surging demand for hard drives and tight supply conditions that benefit the two dominant U.S. players. Toshiba holds only about 10% of the HDD market compared with its American rivals, and analysts noted that ramping new production lines typically involves delays, meaning the competitive impact is more of a longer-term shift than an immediate threat.

Options flow in Seagate turned bearish on the session as the news spread. The broader memory sector was largely unaffected, with the storage-focused drop confined to the two HDD makers while Mag 7 names and the wider chip group traded higher on the day.