Seagate and Western Digital Slide as Toshiba Rivalry Intensifies Over TDK Bidding War

TLDR

• Western Digital stock fell in pre-market trading Tuesday, continuing a volatile stretch tied to Toshiba’s expansion plans.
• Seagate and Toshiba are reportedly bidding against each other for TDK’s magnetic head business, a deal that could be worth billions.
• Wall Street analysts are split on how much Toshiba’s planned capacity increase will hurt Seagate and Western Digital.
• Seagate shares dropped about 7.8% and Western Digital fell around 7% in early Tuesday trading.
• TDK shares rose 5.3% in Japan as the bidding contest news spread.

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Western Digital stock slipped 2.3% in pre-market trading on Tuesday, falling to $431.37. The drop adds to a rough stretch for the stock that began on October 2.

Western Digital Corporation, WDC

That day, shares plunged more than 10% after reports said Toshiba plans to roughly double its hard disk drive production capacity by fiscal 2027. Toshiba is reportedly aiming to lift its market share from about 11% to 30% over the medium term.

Monday brought a rebound, with several Wall Street firms saying the selloff was an overreaction. But Tuesday’s pre-market move suggests that recovery is fading.

Analysts Remain Split on Toshiba Threat

Goldman Sachs kept a Hold rating on Western Digital. The firm warned that Toshiba’s expansion could pressure pricing power and margins over the medium term.

Seagate and Toshiba are locked in a contest for TDK’s magnetic-heads business for hard-disk drives in a deal that could be worth several billion dollars — the latest attempt by AI-related hardware makers to keep pace with demand https://t.co/AcUwUYBEbf

— Bloomberg (@business) October 6, 2026

Morgan Stanley, Bernstein, Citi, and Evercore see it differently. They argue Toshiba’s Philippines factory expansion is too small to ease the tight supply of nearline hard drives that has driven record margins for Western Digital.

Evercore pointed to Western Digital’s vertical integration, including its control of head wafers and magnetic media, as a structural advantage over Toshiba.

The broader market moved higher Tuesday. The S&P 500 gained 0.4% and the Nasdaq rose 0.6%, showing the weakness in Western Digital and Seagate stock is specific to the sector rather than the wider economy.

Western Digital’s next earnings report is set for November 5, 2026. Until then, the Toshiba supply story is likely to remain the main factor moving the stock.

Seagate and Toshiba Compete for TDK Business

Seagate is now facing a separate Toshiba problem. Bloomberg reported Tuesday that Seagate and Toshiba are in a bidding contest to acquire TDK Corp’s business that makes magnetic heads for hard drives.

Any deal is likely to be worth several billion dollars, according to the report. Magnetic heads are key components used to read and write data on hard drive surfaces.

TDK currently supplies these heads to Seagate, Toshiba, and Western Digital. Seagate declined to comment on the report. Toshiba did not immediately respond to requests for comment.

Seagate stock fell 7.8% in early Tuesday trading. Western Digital shares dropped about 7%. TDK shares rose 5.3% in Japan.

Toshiba may have more at stake in this bidding war than its rivals. Research firm TrendForce projects Toshiba will hold just 10% of the global hard drive market in 2026, compared to 48% for Western Digital and 42% for Seagate.

Wedbush analyst Matt Bryson wrote that Seagate would likely struggle to win antitrust approval for a TDK acquisition. He said regulators, Toshiba, large customers, and Japan would all view it as risky for the third hard drive maker to depend solely on Seagate.

The hard drive business has grown quickly this year as artificial intelligence creates demand for data storage. Both Seagate and Western Digital stock have soared in 2026.

That rapid rise has made investors cautious. Shares in both companies dropped sharply on Monday following the first reports of Toshiba’s capacity expansion plans.

Western Digital remains well below its 52-week high of $799.87, though it has climbed far above its 52-week low of $112.52 earlier this year.