Western Digital Falls Up to 12%, Seagate Drops 13% After Toshiba Plans to Double HDD Capacity for AI Data Centers

Western Digital and Seagate Technology sold off sharply on October 2 after Nikkei reported that Toshiba plans to invest roughly 60 billion yen, approximately $380 million, to double its hard disk drive production capacity by fiscal year 2027. The expansion centers on Toshiba's plant in the Philippines and is aimed squarely at AI data center customers, where tight memory supply and SSDs costing roughly 20 times more than HDDs have driven strong demand toward high-capacity hard drives.

At their intraday lows, Western Digital fell around 12% to roughly $405 and Seagate slid about 13% to around $825, reversing gains the two stocks had accumulated as the AI storage trade tightened supply and lifted pricing power. Toshiba said it is targeting 65TB drives by 2030 and ultimately 100TB, a roadmap that signals a sustained push into the premium end of the AI server storage market.

The investor concern is straightforward: Western Digital holds more than 40% of the global HDD market and Seagate is the other dominant player, and both have benefited from constrained supply that supported strong pricing. Toshiba currently holds roughly 10% to 17% of the market, but doubling capacity at its Philippines facility would meaningfully alter the competitive balance. Some analysts noted that ramping new production lines takes time and that Toshiba's timeline stretches to 2027, suggesting near-term pricing may be less affected than the stock moves imply. A Seeking Alpha bull note flagged the Western Digital selloff as an entry point, citing the stock's 30%-plus pullback from its 52-week high near $748 and what it called intact fundamental demand from hyperscaler data centers.