Western Digital reports near-exhausted HDD capacity as AI-driven data center demand spikes, with 2026-2028 allocations sold out, impacting consumer markets.
© A. Krivonosov
Western Digital has announced that its hard drive manufacturing capacity is almost completely exhausted. This shortage is driven by a sharp increase in demand from corporate clients and data center operators working with artificial intelligence. CEO Irving Tan explained during the second-quarter earnings call that capacity for 2026 is already fully allocated to major customers, with long-term contracts signed for 2027 and even 2028. These agreements cover both supply volumes in exabytes and pricing terms.
This shift toward the corporate segment is clearly reflected in the company's revenue structure. Now, up to 89% of Western Digital's income comes from cloud and enterprise solutions, while the consumer market accounts for only about 5%. Against this backdrop, the company is logically focusing on the more profitable and stable demand from data centers.
The primary driver of this shortage is the massive construction of data centers. For storing the enormous datasets required to train and operate AI models, hard drives remain a key solution as the most cost-effective option for massive data storage.
Analysts note that this situation is increasing pressure on the PC components market. If current AI development trends continue, the HDD shortage could persist, potentially leading to higher prices for consumer storage devices.