Seagate and Toshiba are competing to acquire the magnetic head manufacturing business of TDK. Sources indicate the potential deal could be valued at several billion dollars. Toshiba initiated discussions in the spring, while Seagate entered the bidding process during the summer with a higher offer.
TDK is currently the world's only independent manufacturer of HDD magnetic heads. While Seagate and Western Digital maintain their own production facilities, they still utilize TDK components to scale output. Toshiba relies entirely on TDK for these parts, which are critical for its upcoming high-capacity HAMR drive production.
Representatives from all three companies met in Tokyo last week to discuss potential supply guarantees, including the possibility of forming a joint venture. This move aims to mitigate risks for Toshiba should Seagate successfully acquire the asset, which would consolidate control over a key industry technology.
The market for hard drives is highly concentrated, with Seagate and Western Digital each holding approximately 45% of the global market by capacity, while Toshiba accounts for about 10%. Demand for HDDs is currently rising due to the need for large-scale, cost-effective data storage in AI-driven data centers.
For TDK, the sale represents a strategic shift away from a capital-intensive business with historically low margins. The company intends to reallocate resources toward batteries, passive electronic components, and sensors, targeting growth in new sectors like AI-enabled smart glasses.
