Seagate and Toshiba are competing to acquire the magnetic head manufacturing business of TDK, the last independent supplier of this critical HDD component. While Western Digital is not currently involved in the bidding, the potential deal is estimated to be worth several billion dollars.
Toshiba entered negotiations with TDK in the spring of 2026, but Seagate joined the process in the summer of 2026 with a higher offer. TDK is considering exiting this business, which it views as volatile and low-margin, to focus resources on batteries, sensors, and passive electronic components.
The acquisition is strategically vital, as magnetic heads are essential for HDD production. Toshiba, which currently lacks its own head manufacturing capabilities, relies heavily on TDK. Access to these technologies is crucial for Toshiba's plans to mass-produce high-capacity HAMR drives and increase its market share.
As of the second quarter of 2026, Toshiba held an 11% share of the global HDD market, trailing behind Seagate with 43% and Western Digital with 46%. Toshiba aims to double its HDD production capacity by the 2027 fiscal year to meet rising demand from AI-focused data centers.
Analysts warn that the deal will likely face intense scrutiny from antitrust regulators, who increasingly view data storage infrastructure as a matter of economic security. The winner of the tender could gain significant control over the supply chain, potentially limiting competitors' production capabilities.
