The bidding war between Seagate and Toshiba for TDK's HDD magnetic-head business is intensifying, with the transaction reportedly potentially reaching several billion dollars.
Seagate Technology Holdings of the United States and Japan's Toshiba are competing to acquire the HDD magnetic-head business of TDK, a major Japanese electronic components manufacturer. Following news of the potential transaction, TDK shares surged in afternoon trading on the Tokyo market, briefly gaining more than 7%. Trading volume swelled to approximately 3 times its 20-day average.
According to reports, the transaction could be worth several billion dollars at most. Toshiba reportedly began approaching TDK this spring, and competition intensified after Seagate presented more favorable acquisition terms in the summer.
TDK is the world's only independent HDD magnetic-head manufacturer and supplies all 3 companies: Seagate, Toshiba and Western Digital. If the acquisition is completed, the buyer could gain control of a critical component in the HDD supply chain.
Against a backdrop of rapidly growing demand for storage for AI data centers, both companies are seeking to own their magnetic-head supply or secure supplies. Toshiba is reportedly planning to double its HDD production capacity for AI applications by fiscal 2027, while Seagate is said to be seeking to strengthen its leadership through vertical integration.
Negotiations are ongoing, and the parties involved have declined to comment. The transaction may face uncertainties, including antitrust review.