Seagate, HDD Boom Stock, Plunges 9.2%

On Friday (local time), shares of Seagate, a hard disk drive (HDD, large-capacity data storage device) maker, plunged 9.2% on the New York market from the previous session. Western Digital fell 6.9%. The two companies had surged more than 200% and 140%, respectively, this year as AI data center expansion boosted HDD demand amid a supply shortage, but a wave of sell-offs to lock in profits is believed to have followed the emergence of possible supply increases.

Bloomberg News, citing multiple sources, reported that Seagate and Japan's Toshiba are competing to acquire the HDD magnetic head business of Japan's TDK. Toshiba reportedly began negotiations with TDK first this spring, with Seagate later offering a higher price in the summer. The acquisition is expected to be worth up to several billion dollars.

Magnetic heads are a core component that records and reads data on HDDs. TDK is the only independent producer of HDD magnetic heads, supplying all three major makers — Seagate, Western Digital and Toshiba. In particular, Toshiba relies entirely on TDK for magnetic heads, and analysts say the competitive landscape of the industry could shift depending on who acquires the business.