TDK is the world's sole independent supplier of magnetic heads for hard disk drives. Seagate and Western Digital maintain internal head production but also source components from TDK, while Toshiba relies entirely on TDK for these parts. TDK currently produces heads for various recording technologies, including HAMR, EAMR, and MAMR.
Toshiba reportedly initiated discussions to acquire TDK's HDD head division in spring 2026. Seagate subsequently entered negotiations in summer with a higher bid. The potential deal is estimated to be worth several billion dollars. Such an acquisition could grant the buyer significant control over industry pricing and supply chains.
TDK seeks to exit the HDD head business to focus on batteries, sensors, and passive components, aiming to capitalize on AI-related demand. The company requires continuous investment in head technology, which is characterized by low margins and high volatility. A sale would provide capital for its strategic shift.
Representatives from the companies reportedly met in Tokyo to discuss supply preservation, including a potential joint venture. However, Toshiba denied that any meeting occurred or that it plans to acquire the head production business. Seagate and TDK declined to comment on the reports.
Any transaction would likely face significant regulatory scrutiny due to the concentrated nature of the HDD market. According to TrendForce, Seagate and Western Digital each hold approximately 45% of the market in terms of bits shipped, while Toshiba accounts for about 10%.
