Supply Chain Battle: Seagate and Toshiba Compete for TDK's Magnetic Heads
HDD manufacturers Toshiba and Seagate are reportedly competing for TDK's magnetic head business. According to Bloomberg, citing anonymous sources, both companies aim to acquire the unit to better position themselves against the high demand driven by the AI boom in data centers.
Securing the Supply Chain
The primary driver for interest in TDK (operating through its SAE Magnetics (HK) Ltd. division) is that it is the only independent manufacturer of magnetic heads for hard drives. While Seagate and Western Digital produce their own magnetic heads, Toshiba is entirely dependent on TDK for these components. This dependency becomes critical amid the global memory shortage and the massive infrastructure build-out for AI.
For Toshiba, acquiring TDK's technology is also relevant for the future mass production of HAMR (Heat-Assisted Magnetic Recording) drives. While Seagate has already implemented HAMR in serial production, the technology remains on the roadmaps for both Toshiba and Western Digital.
Competition and Market Implications
According to Bloomberg, Toshiba began negotiations with TDK in the spring, but Seagate reportedly entered the discussions in the summer with a higher offer. There has been no official confirmation of these talks: Seagate and TDK declined to comment, and a Toshiba spokesperson offered a half-hearted denial, specifically rejecting the possibility of a joint venture.
If Seagate secures the deal, it could create a challenging situation for Toshiba, potentially making access to magnetic heads more difficult or driving up prices. However, such an acquisition could also trigger antitrust regulations, requiring the acquiring company to continue serving the open market as it does currently.
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