Western Digital Forecasts Persistent AI-Driven HDD Supply Constraints Through 2027
Western Digital (WDC) anticipates that demand for hard disk drives driven by artificial intelligence and cloud infrastructure will outpace supply through at least 2027. According to CFO Kris Sennesael, the company's business is now largely dependent on cloud customers, with exabyte storage needs growing over 25% annually. The firm expects continued supply constraints due to technological transitions but plans to ramp up production of higher-capacity drives like its 32TB ePMR and upcoming HAMR models. The company reported strong pricing trends, with a year-over-year increase in price per terabyte by about 18%–19%. Long-term contracts cover much of Western Digital’s supply through the end of 2027 and into 2028. With gross margins reaching mid-50%, excess cash is expected to be used for share buybacks and dividends, supporting investor returns. Western Digital does not foresee a slowdown in AI infrastructure demand but acknowledges that growth may vary year-to-year. The company’s first HAMR drives are set to ship by early 2027 after passing rigorous customer qualification processes.
Topics: AI infrastructure cloud computing hard disk drives storage demand