The world’s biggest hard drive manufacturers have already allocated all the units they will produce this year after hyperscale AI and cloud operators secured the bulk of available capacity.
AI Infrastructure Buys Up The Year
Western Digital and Seagate have both confirmed that their nearline hard drive production for calendar year 2026 is effectively spoken for.
Western Digital chief executive Tiang Yew Tan told analysts: “We’re pretty much sold out for calendar ’26. We have firm purchase orders with our top seven customers. And we’ve also established long-term agreements with two of them for calendar year ’27 and one of them for calendar year ’28.”
Seagate CEO Dave Mosley was equally direct: “Our nearline capacity is fully allocated through calendar year 2026, and we expect to begin accepting orders for the first half of calendar year 2027 in the coming months… multiple cloud customers are discussing their demand growth projections for calendar 2028, underscoring that supply assurance remains their highest priority.”
In simple terms, the hyperscalers have moved first and bought ahead.
Nearline drives are the high-capacity workhorses used in data centres for bulk storage. They are not consumer PC drives. They are 30TB-plus, 40TB-class disks that underpin cloud storage, AI training datasets and archival systems.
Why AI Is Driving The Squeeze
The AI boom has created a double demand curve.
Training large models requires vast amounts of storage for datasets, checkpoints and logs. Inference workloads generate new data that also needs to be stored, replicated and backed up. Cloud providers are scaling capacity aggressively.
Technology market research firm Omdia now forecasts total server spend in 2026 at around $590 billion, with datacentre capex exceeding $1 trillion. The top ten cloud providers are expected to account for more than 70 percent of that spend, with AI-optimised servers representing roughly 80 percent of total server investment.
Storage sits at the heart of that build-out.
Western Digital has pivoted heavily towards this segment. Around 89 percent of its revenue now comes from cloud customers, compared with just 5 percent from consumers. This is no longer a PC storage business. It is AI infrastructure plumbing.
Implications For The Wider Market
For hyperscalers, long-term supply agreements bring certainty. For everyone else, the cupboard looks thinner.
Analysts have warned that discretionary buyers, including mid-sized enterprises and traditional server customers, may struggle to secure high-capacity drives at predictable prices. Corporate IT projects that assumed hard drives would provide a cost-effective capacity tier may need to revisit budgets.
There is also a ripple effect. AI demand has already strained DRAM and NAND flash markets. If SSD prices rise, some buyers will pivot back to HDDs for bulk storage, adding further pressure to supply.
Andrew Buss, from global market intelligence and research firm International Data Corporation (IDC), recently noted that AI growth is consuming “large amounts of fast flash-based NVMe SSDs”, pushing up prices and prompting a reconsideration of HDD-based arrays where workloads allow.
The result is an unusual reversal. Hard drives, once seen as legacy technology, are back at the centre of infrastructure planning.
Technology Race Intensifies
At the same time, the technical arms race continues.
Western Digital is pushing towards 40TB and 44TB drives this year and has outlined a roadmap to 100TB by 2029, supported by new 14-platter designs. Seagate is advancing its HAMR technology and has publicly targeted 100TB drives by the end of the decade.
These capacity gains matter. Hyperscalers want more storage per rack, per watt and per square metre. Increasing areal density and platter counts is now a strategic priority, not an incremental upgrade.
The challenge is manufacturing capacity. HDD production cannot be scaled overnight. Tooling, media, heads and assembly lines require long lead times. When hyperscalers lock in output years in advance, smaller buyers sit further back in the queue.
What Does This Mean For Your Business?
For Western Digital and Seagate, the sell-out provides revenue visibility rare in the storage sector. Multi-year agreements reduce demand uncertainty and underpin capital investment plans.
For AI infrastructure players, it reinforces concentration. The largest cloud providers are able to secure supply at scale, strengthening their competitive position.
For enterprises and SMEs, it raises practical questions. If you are planning a server refresh or building on-premise storage, availability and pricing assumptions may need adjustment.
There is also a structural concern here. When the majority of global HDD output is effectively pre-booked by a small number of hyperscalers, the market becomes less flexible. Innovation may skew even further towards the needs of AI data centres rather than general-purpose enterprise workloads.
Critics argue that the AI infrastructure boom is distorting supply chains across silicon, memory and now spinning disk. Supporters counter that it is driving investment, accelerating innovation and revitalising a technology many had written off.
What is clear here is that the humble hard drive, long overshadowed by flash, has become a strategic asset again. In an AI-first world, bulk storage is no longer a commodity. It is strategic leverage.