Western Digital falls 7% as Toshiba plans HDD expansion

Western Digital shares dropped 7% on Friday, October 2, 2026, after reports emerged that rival Toshiba plans to significantly expand its hard disk drive (HDD) capacity. Competitor Seagate Technology fell 11%, while SanDisk slipped about 1% following the news.

According to Nikkei, Toshiba intends to invest approximately 60 billion yen ($400 million) to double its HDD production capacity by fiscal 2027. The project will center on its manufacturing plant in the Philippines to serve increasing storage demand from artificial intelligence data centers.

The HDD sector is controlled by three players: Seagate, Western Digital, and Toshiba. Toshiba currently holds slightly more than 10% of the market by capacity, but it has targeted a 30% medium-term market share. Investors grew concerned that the expansion could increase competitive pressure on industry pricing and market shares.

The drop triggered profit-taking after strong share gains this year. Prior to Friday's decline, Western Digital shares had gained about 170% in 2026, while Seagate had risen roughly 240% amid enthusiasm for AI infrastructure storage requirements.