Disk bubble: After selling its recording media business to Imation, TDK now focuses primarily on sensors, power supplies and other advanced electronic devices. HDD magnetic heads, one of TDK’s remaining business interests, may soon find a new home with a major hard drive manufacturer.
According to sources familiar with the matter, Seagate and Toshiba are currently fighting over the acquisition of TDK’s magnetic head business. The Japanese company is one of the few independent manufacturers still producing this important electronic component, but the HDD giants are now looking to strengthen their supply chains as the entire magnetic recording industry experiences a second, AI-powered renaissance.
The unnamed sources said Toshiba began talks with TDK earlier this year, while Seagate made a higher offer in the summer. While the exact amount is still unclear, the acquisition is expected to be worth several billion dollars. The successful bidder would acquire the production of TDK’s HDD magnetic recording heads, thereby strengthening its hard drive business for the coming years.
Seagate, Toshiba and Western Digital are the three major hard drive manufacturers still in business today after market and technology developments have upended the industry over the past few decades. Both Seagate and WD have their own magnetic head production lines. Toshiba relies on external partners such as TDK to assemble its HDD units.
Losing TDK’s support would be extremely detrimental to Toshiba’s business, but Seagate could also lose a key partner as its HDD production becomes increasingly important. Seagate and WD are seeing massive increases in sales and pre-orders as AI hyperscalers look for a “cheap” storage solution to further expand their LLM-based technology offerings.
The potential takeover could ultimately become an industry-threatening situation, which is why representatives from all interested parties met in Tokyo last week to discuss the matter further. According to the sources, executives from Seagate, Toshiba and TDK are even considering forming a new joint venture. In any case, the talks are still in the early stages and if no agreement is reached, everything could fail at some point.
Seagate and WD each account for around 45% of the modern HDD market, while Toshiba serves customers in the remaining 10%. TDK is apparently no longer interested in producing HDD magnetic heads as the company looks for fresh funds to further invest in key business areas such as batteries, passive components and sensors.
