Why it matters
- Seagate and Western Digital have been among the market's biggest winners this year on demand from AI data centers.
- More supply from Toshiba could ease the shortage that has supported hard-drive prices.
- The drop shows how quickly crowded AI trades can reverse on news about competition.
Shares of Seagate Technology and Western Digital tumbled Friday after a report that their smaller rival, Toshiba, plans to sharply increase hard-disk drive production.
Seagate closed down 14.29% and Western Digital fell 12.18%, according to TheStreet. The broader market rose.
What Toshiba plans
Toshiba plans to double its hard-drive production capacity within fiscal 2027, according to a Nikkei report cited by MarketScreener. The company will invest about 60 billion yen, or roughly $380 million, to expand its operations in the Philippines. It would be Toshiba's first major hard-drive investment in several years.
Toshiba holds just over 10% of the hard-drive market measured by storage capacity and is targeting a 30% share over the medium term, MarketScreener reported. The industry has three major makers: Seagate, Western Digital and Toshiba.
A big year for storage stocks
Both U.S. companies had large gains before Friday. Seagate's stock had risen more than 200% this year and Western Digital's more than 140%, Yahoo Finance reported, as the buildout of AI data centers drove demand for storage.
Those gains reflected a supply shortage, MarketScreener reported. A rival doubling its capacity could ease that shortage, which is why investors worried about pricing and market share.
The plan will take time to reach the market. Toshiba's target runs through its 2027 fiscal year.
