Seagate and Toshiba battle for TDK's HDD head business, a critical hard drive component

Seagate Technology and Toshiba are reportedly in a bidding war to acquire TDK's hard disk drive magnetic head business in a transaction possibly worth several billion dollars, according to Bloomberg. For Seagate, the acquisition would bolster its supply of HDD heads, which it also manufactures internally. Conversely, Toshiba relies solely on TDK for magnetic heads to produce its hard drives.

If Seagate were to acquire TDK's HDD heads division, Toshiba would then depend on Seagate for its supply. TDK is the sole independent supplier of HDD magnetic heads, making it a crucial supplier to all major hard drive manufacturers. In recent years, TDK has started producing HDD heads for Seagate's heat-assisted magnetic recording (HAMR) drives, Western Digital's energy-assisted magnetic recording (EAMR) products, and Toshiba's microwave-assisted magnetic recording (MAMR) technology drives.

This places significant importance on TDK's technology for Toshiba, as their upcoming 30TB-class HDDs are expected to utilize MAMR technology, with future generations relying on HAMR. Developing these advanced write and read heads is a complex and time-consuming process, rendering TDK a vital enabler for Toshiba's HDD business, both for current products and future generations.

Toshiba reportedly approached TDK about acquiring its HDD head operation in spring 2026, initiating negotiations in summer with a higher offer. The potential acquisition could be worth as much as several billion dollars, potentially altering the competitive dynamics of the HDD industry. Controlling TDK's magnetic-head operation would grant the successful bidder greater pricing power and limit competitors' ability to swiftly increase HDD output.

Both Seagate and Toshiba are concerned about maintaining access to TDK's heads if a rival acquires the business. For TDK, selling the HDD-head business would offer an exit from a volatile, low-margin business that demands continuous investment as magnetic recording technologies evolve. The company is shifting resources towards batteries, passive components, and sensors, anticipating increased AI-related demand from devices like smart glasses.

Selling the HDD-head business could generate capital for TDK to accelerate investments in these areas. Executives from Seagate, Toshiba, and TDK reportedly met in Tokyo recently to discuss retaining supplies of magnetic heads, including the possibility of forming a joint venture. However, these negotiations are preliminary and might not result in a deal.

Regulatory scrutiny is likely due to the concentrated nature of the HDD market and TDK's unique position within it. Seagate and Western Digital each account for approximately 45% of HDD shipments in terms of bits shipped, while Toshiba controls around 10% of the market.