Seagate Technology and Toshiba are competing to acquire the hard drive head business from TDK. Negotiations began in the spring with Toshiba, followed by a higher bid from Seagate during the summer. The potential deal is valued at up to several billion dollars, though talks remain confidential and preliminary.
TDK is currently the world's only independent manufacturer of hard drive magnetic recording heads. These components are essential for data read and write operations. While Seagate and Western Digital produce some heads internally, they rely on TDK during demand spikes. Toshiba is entirely dependent on TDK for these parts, which are critical for its HAMR drive production plans.
The acquisition is driven by surging demand for storage in AI data centers, where mechanical hard drives are favored for large-scale, low-cost data storage. According to TrendForce, Seagate and Western Digital each hold approximately 45% of the market by capacity, while Toshiba holds about 10%.
TDK aims to divest this business to reallocate resources toward batteries, passive components, and sensors, particularly for AI-enabled wearable devices like smart glasses. The hard drive head unit has historically shown low profitability and requires significant R&D investment to keep pace with technological advancements.
Executives from the involved companies met in Tokyo last week to discuss supply stability and the potential for a joint venture. Any final agreement will face antitrust regulatory scrutiny, as authorities increasingly view data center storage capacity as a matter of economic security.
