Seagate Forecasts Continued HDD Demand Growth Driven by AI and Cloud
Seagate Technology anticipates sustained growth in hard disk drive (HDD) demand through fiscal 2027, fueled primarily by public cloud spending, enterprise data centers, and artificial intelligence applications. According to CFO Gianluca Romano, the current HDD upcycle has been ongoing for over three years with improving revenue and profitability. Seagate is leveraging heat-assisted magnetic recording (HAMR) technology to increase storage capacity per drive rather than focusing on unit volume growth. The company aims to achieve at least 25% annual exabyte growth by transitioning from 30 TB to 40 TB drives, with plans for a 50 TB product in about a year. Strong pricing and tight supply are supporting favorable cash flow, which Seagate intends to use for share repurchases after reducing debt while maintaining dividends. Romano noted that customer purchase orders and long-term agreements already cover most of the next several quarters, indicating robust demand. These contracts specify product mix, pricing, delivery timing, and exabyte-volume commitments used by customers in planning data-center expansions.
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Topics: AI applications cloud computing HDD demand supply-demand dynamics