- Western Digital CEO Says Its 2026 Hard Drive Capacity Is Already Fully Reserved
- Corporate customers dominate orders, leaving consumer products at just 5% of revenue.
- AI-driven data growth intensifies pressure on hard drive supply chains globally
Western Digital revealed that its entire hard drive capacity for 2026 was apparently already fully reserved, primarily due to enterprise-level deals with hyperscalers and large cloud providers.
The increase in demand is linked to the continued expansion of data centers, particularly in the United States, where large amounts of content must be stored efficiently.
Hard drives remain the most cost-effective solution for storing exabytes of data, including retrieved web content, processed backups, and inference logs needed for artificial intelligence workloads.
Western Digital enters into multi-year agreements
“As we’ve highlighted, we’re basically fully booked for calendar 2026. We have firm purchase orders with our top seven customers,” Western Digital CEO Irving Tan said during the company’s recent financial results.
“And we also established LTAs with two of them for calendar 2027 and one for calendar 2028. Obviously, these LTAs have a combination of exabyte volume and price.”
As AI adoption grows, pressure on suppliers intensifies, echoing similar pressures previously seen with DRAM, NAND and other critical PC components.
The bulk of Western Digital’s orders come from cloud storage providers that rely on hard drives for long-term storage of massive data sets.
Consumer products now represent only 5% of its revenue, while cloud-oriented activities contribute almost 89%.
The scarcity of available hard drives has pricing implications as demand outstrips supply and production schedules fail to quickly meet the needs of hyperscalers.
Historically, shortages of essential components such as RAM and SSDs have resulted in temporary price increases, and the current situation for hard drives seems likely to follow a similar pattern.
Manufacturing constraints and the pace of AI-enabled data center expansion create a scenario where companies could face higher costs for the storage capacity they need.
Analysts note that while hard drives remain cheaper per terabyte than RAM or other memory solutions, their low availability can still put upward pressure on procurement budgets.
Western Digital’s focus on enterprise contracts reflects the broader trend in the PC and storage industries toward AI workloads.
Hyperscalers, cloud storage providers and large-scale IT operations are increasingly the primary consumers of high-capacity drives, while the traditional desktop and consumer segments are at a disadvantage.
The company has aligned its production to meet these demands, leaving the consumer market with limited options.
Although HDD technology itself is mature, the combination of AI-driven demand, supply chain constraints and continued cloud expansion means capacity will remain limited.
It is now certain that companies are driving the hard drive market dynamics, and price fluctuations are expected to continue.
Via Wccftech
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