Toshiba's HDD output boost triggers double‑digit drops in Seagate and Western Digital stocks

Shares of STX and WDC fell sharply on Friday after a Nikkei report that Toshiba plans to double its production capacity for hard disk drives used in AI data centers by fiscal 2027. Seagate was down 12.3% at $829.34 and Western Digital down 11.8% at $408.00 in late-morning trading, per SentiSense data, after early losses of about 10% and 7% respectively.

According to the report, as relayed by Investing.com, Toshiba will spend about 60 billion yen ($380 million) on facilities in the Philippines, its first major HDD investment in about five years, and aims to mass-produce 65-terabyte-class drives by 2030. Toshiba wants to lift its market share from just over 10% to 30% over the medium term. The baseline depends on the measure: a July TrendForce estimate put Western Digital and Seagate above 40% of the global HDD market each, with Toshiba near 17%.

The selloff goes to the heart of the bull case for both stocks, which rests on tight HDD supply. Western Digital CEO Irving Tan has said the tight supply environment "provides us an opportunity for increased pricing leverage," and Seagate CEO Dave Mosley has said "the total number of units is not really increasing". Not everyone sees the threat as imminent: Citi analyst Asiya Merchant argued the market may be overreacting, noting that Toshiba relies on outside suppliers for critical components, which would themselves need large capacity increases for Toshiba to reach its goal.

What to watch: whether Toshiba confirms the plan in a formal announcement, any change in HDD pricing commentary from Seagate and Western Digital, and whether component suppliers signal the capacity additions the plan would require.