Seagate Technology Holdings Plc and Toshiba Corp. are competing to acquire TDK Corp.'s hard-disk-drive magnetic-head unit in a deal valued at several billion dollars, according to people familiar with the talks. The business is the sole independent supplier of the components that read and write data on spinning disks—a critical chokepoint as AI workloads drive demand for long-term, low-cost storage capacity.
Toshiba initiated discussions with TDK in the spring, followed by a higher bid from Seagate during the summer. Seagate and TDK declined to comment. Toshiba did not immediately respond to requests for comment.
TDK's independence has been essential to competition among Seagate, Toshiba and Western Digital Corp. which collectively dominate the market. By TrendForce's estimates, Seagate and Western Digital each control roughly 45 percent of HDD supply by bits, with Toshiba at around 10 percent. Seagate and Western Digital produce some heads internally but rely on TDK to meet demand spikes. Toshiba depends entirely on TDK.
For Toshiba, the stakes are higher. The company needs TDK's expertise to scale production of heat-assisted magnetic recording (HAMR) drives—higher-capacity units essential to closing the gap with larger competitors. A loss of supply could stall that roadmap.
Any acquisition will trigger antitrust review. U.S. and allied governments increasingly view data-center storage capacity as infrastructure critical to economic security. An acquirer controlling both a major drive manufacturer and the sole independent head supplier could restrict supply to rivals, raising costs for smaller players and data-center operators.
For TDK, the business has become a distraction. Thin margins and volatile performance prompted the company to shift focus toward batteries, passive components and sensors for AI-enabled wearables. A sale would release capital for those higher-margin bets.
Executives from all three companies met in Tokyo last week to discuss terms, including the possibility of a joint-venture structure that would preserve some independence. Those talks remain in early stages and could collapse. Both bidders have also demanded assurances that they can continue purchasing heads from TDK if they lose the auction.
The winner gains leverage over a scarce input. Control of magnetic-head supply—and pricing—could ripple through the entire storage stack, from drive manufacturers to data-center operators scrambling to build AI infrastructure.
