Seagate and Toshiba compete to buy TDK's HDD magnetic head business
In short
Seagate and Toshiba are competing to acquire TDK's business making magnetic heads for hard drives, a deal that could be worth several billion dollars, according to Bloomberg reports cited by Russian tech outlets. Toshiba, which relies entirely on TDK for heads, began talks in spring, while Seagate joined later with a higher offer; talks continue with no final decision. TDK is the world's only remaining independent maker of HDD magnetic heads and supplies all three large HDD producers.
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Seagate and Toshiba are competing to buy the magnetic-head business of Japan's TDK, one of the most critical links in the global hard-disk supply chain, according to Bloomberg reports cited by the three outlets. The potential deal could be worth several billion dollars and would substantially change the balance of power in the storage market, they say. Toshiba began talks with TDK in spring, while Seagate joined the process later with a higher offer, sources told Bloomberg. The talks are continuing and no final decision has been made. [ 1 , 2 , 3 ]
TDK's value lies in its unique position. It is the world's only remaining independent producer of magnetic heads for hard drives — the components that write and read data on magnetic platters — and it supplies all three large HDD manufacturers: Seagate, Western Digital and Toshiba. Seagate and Western Digital have their own head production but also buy from TDK to raise output during demand peaks, while Toshiba relies entirely on TDK for heads, the reports say. [ 1 , 2 , 3 ]
That dependence matters for Toshiba as it plans mass production of high-capacity drives using HAMR, a heat-assisted recording technology that increases storage density. A purchase of TDK by Seagate could leave Toshiba exposed, a risk the parties have discussed, according to Bloomberg. Neither buyer intends to take over all of TDK, only the head-making business, and Western Digital is not taking part in the contest, CNews reported. [ 1 , 2 , 3 ]
Representatives of Seagate, Toshiba and TDK met in Tokyo last week to discuss mechanisms that would guarantee continued head supplies regardless of the outcome, with a joint venture among the options under consideration, iXBT reported, citing Bloomberg. [ 1 ]
Toshiba told Bloomberg that the information in the report does not correspond to its own understanding of the situation, 3DNews reported. TDK shares rose 7.3% in Tokyo, while Western Digital and Seagate shares fell more than 1% before the main trading session, according to the same outlet. [ 3 ]
The contest comes as hard drives have become a scarce product amid the AI boom. Three large players remain on the global HDD market, with earlier consolidation including Western Digital's $4.3bn purchase of HGST in 2011. Toshiba has a plan to double its HDD production capacity by fiscal 2027 and is sticking to it, CNews reported, pointing to growing demand from AI-oriented data centres. Bloomberg did not specify why Seagate wants TDK's technology, CNews noted. [ 2 , 3 ]
Why it matters
TDK supplies magnetic heads to all three remaining hard-drive makers, and a change of ownership could affect how quickly they can raise output at a time when drives are in short supply because of AI data-centre demand. For Toshiba, losing access to TDK could complicate its plan to start mass production of HAMR drives. The documents give no indication of when a decision will be reached.
Key facts
- Seagate and Toshiba are competing to buy TDK's magnetic-head business for hard drives, according to Bloomberg reports cited by the outlets. [ 1 , 2 , 3 ]
- TDK is the world's only independent producer of HDD magnetic heads and supplies Seagate, Western Digital and Toshiba. [ 1 , 2 , 3 ]
- Toshiba depends entirely on TDK for heads, while Seagate and Western Digital have their own production and turn to TDK during demand peaks. [ 1 , 3 ]
- Toshiba began talks with TDK in spring, and Seagate entered later with a higher offer; the potential deal is estimated at several billion dollars. [ 1 , 3 ]
- Neither Toshiba nor Seagate intends to buy all of TDK, only its head-making business, and Western Digital is not involved, CNews reported. [ 2 ]
- Representatives of Seagate, Toshiba and TDK met in Tokyo last week to discuss guaranteeing head supplies whatever the outcome, with a joint venture among the options considered. [ 1 ]
- Toshiba told Bloomberg that the information in the report does not correspond to its own understanding of the situation, while TDK shares rose 7.3% in Tokyo and Seagate and Western Digital shares fell more than 1% before the main session. [ 3 ]
- Toshiba plans to double its HDD production capacity by fiscal 2027, citing growing demand from AI-oriented data centres. [ 2 ]
Confirmed by several sources
- Seagate and Toshiba are competing for TDK's HDD magnetic-head business, as reported by Bloomberg. [ 1 , 2 , 3 ]
- TDK is the only independent manufacturer of HDD magnetic heads and supplies all three large HDD producers. [ 1 , 2 , 3 ]
- Toshiba relies entirely on TDK for magnetic heads, whereas Seagate and Western Digital have their own head production. [ 1 , 3 ]
- The potential transaction is estimated at several billion dollars. [ 1 , 3 ]
- Toshiba began talks with TDK in spring, before Seagate offered more. [ 1 , 3 ]
Still unclear
- Whether a deal will be agreed and on what terms. The documents say talks are continuing and no final decision has been made; the price is described only as an estimate from sources.
- Why Seagate wants TDK's head technology. CNews says Bloomberg did not specify Seagate's reasons.
- Which elements of the Bloomberg report Toshiba disputes. 3DNews says Toshiba told Bloomberg the information does not match its understanding, without detailing the disagreement.
- Whether a joint venture will be set up to secure supplies. It is listed as one of the mechanisms under discussion, with no decision reported.
What local media are saying
Timeline, local time
- iXBT reports, citing Bloomberg, that Seagate and Toshiba are competing for TDK's magnetic-head business, that Toshiba opened talks in spring and Seagate joined in summer, and that the parties met in Tokyo last week to discuss securing supplies. [ 1 ]
- CNews reports that neither buyer wants all of TDK, that Western Digital is not taking part, and that Toshiba plans to double HDD capacity by fiscal 2027. [ 2 ]
- 3DNews reports Toshiba's statement that the Bloomberg report does not match its understanding, and that TDK shares rose 7.3% in Tokyo while Seagate and Western Digital shares fell more than 1% before the main session. [ 3 ]