Seagate and Toshiba said to bid for TDK's hard drive head business

Seagate and Toshiba are competing to acquire TDK's hard disk drive magnetic head business, people familiar with the matter said, as both try to keep up with demand for storage equipment in AI data centers. Toshiba opened negotiations with TDK in the spring, and Seagate submitted a higher offer in the summer, the people said. The transaction could be worth up to several billion US dollars. [ 1 , 2 , 3 , 4 ]

TDK is described as the world's only independent manufacturer of HDD magnetic heads, the component that reads and writes data inside a drive, and it supplies both bidders as well as Western Digital. Seagate and Western Digital produce some heads themselves but still rely on TDK when demand surges, while Toshiba depends entirely on the Japanese company for the part, according to IT Home's account of the Bloomberg report. Toshiba plans to mass-produce heat-assisted magnetic recording drives to close the gap with larger rivals, a plan that depends on TDK's technology, the report said. [ 1 ]

Executives of the three companies met in Tokyo last week to discuss how to secure continued supply of the component, including the possibility of a joint venture, IT Home reported. The negotiations remain at an early stage and the deal could still collapse. Both IT Home and cnBeta said any purchase would be subject to antitrust review, with regulators increasingly treating data center storage capacity as part of economic security. [ 1 , 4 ]

On market share, IT Home cited TrendForce data showing Seagate and Western Digital each hold roughly 45% of the HDD market by storage capacity, with Toshiba at about 10%. CLS reported that TDK shares rose 7.3% in Tokyo on Tuesday afternoon, with trading volume close to three times the 20-day average. [ 1 , 2 ]

TDK is weighing a sale as the head business has long carried low profitability and requires continued research spending to keep pace with magnetic recording technology, according to IT Home. The Tokyo-based company is directing more internal resources to batteries, passive components and sensors, where it sees AI-related demand from wearables such as smart glasses, and a sale would free up cash for those businesses, the report said. cnBeta similarly described TDK as refocusing on batteries, passive components and sensors and seeking new growth areas in the AI era. [ 1 , 4 ]

cnBeta reported separately that Toshiba plans to invest about 60 billion yen, roughly 380 million US dollars, to expand HDD production at a plant in the Philippines, aiming to lift its share of the global HDD market by capacity from slightly above 10% to about 30% in the medium term, and that it has shown a 12-platter high-capacity 3.5-inch drive on a path toward 65TB and 100TB products. After Toshiba announced the capacity expansion, Seagate and Western Digital shares fell on concern that tighter supply could ease, though analysts quoted by cnBeta said the added capacity would not change the global market structure in the short term and that a real supply shift might only become visible around 2028. [ 4 ]