Seagate Technology (NASDAQ: STX) shares extended their decline on Wednesday as Toshiba pushed back against a report that the companies were competing for TDK Corp.’s hard-disk-drive magnetic-head business.
Seagate was trading at $795.72 shortly after the opening bell, down 1.05% from Tuesday’s $805.63 close. The stock had tumbled 9.18% in the previous session, when Bloomberg reported that Seagate and Toshiba were pursuing TDK’s magnetic-head operations.
Specifically, the report said Toshiba opened discussions with TDK in the spring, with Seagate later submitting a higher offer in the summer. The potential transaction could be worth several billion dollars.
No transaction has been announced, and the discussions were described as preliminary.
Toshiba Challenges Reported Bid Contest
Toshiba subsequently disputed the account. A company spokesperson told Bloomberg that the report was “inconsistent” with Toshiba’s understanding of the situation, while Japan Industrial Partners, Toshiba’s principal backer, gave a similar response.
Toshiba also denied that three-party discussions involving itself, TDK and Seagate had taken place regarding supplies of HDD heads. Bloomberg’s original account had said representatives of the companies discussed ways to preserve access to magnetic heads, including a possible joint venture.
TDK has not confirmed a transaction. The company said media reports about its HDD-head business were not based on a TDK announcement and that it had not made any decisions.
The supply-chain structure helps explain why the magnetic-head business is central to the reported discussions. TDK group company SAE Magnetics describes itself as the only independent manufacturer of magnetic recording heads serving the HDD industry. TDK has also said it supplies magnetic heads to HDD manufacturers worldwide.
Seagate and Western Digital also have their own head-manufacturing capabilities. Seagate says it designs and manufactures critical HDD technologies, including read/write heads. Western Digital says it designs and manufactures substantially all of the recording heads required for its products. Toshiba, meanwhile, has publicly identified TDK as an HDD-head manufacturing partner in its development of higher-capacity nearline drives.
Toshiba Is Also Expanding AI-Storage Capacity
The reported contest follows Toshiba’s recently announced expansion of data-center HDD production, adding competitive context to the latest Seagate move.
Last week, Toshiba said newly expanded production lines at its Laguna Technopark facility in the Philippines began manufacturing nearline HDDs for AI- and cloud-driven data-center demand and made their first shipment. The company plans to invest more to increase annual production capacity, measured by storage capacity, to nearly twice its fiscal 2025 level by fiscal 2027.
News of Toshiba’s planned capacity expansion had already weighed on Seagate shares. The stock dropped 10.21% on Oct. 2, rebounded 4.49% the following Monday, and then fell 9.18% Tuesday. At Wednesday’s price of $795.72, Seagate was about 15.8% below its Oct. 1 close of $945.57.
Separately, Seagate Tokenized bStocks (STXB), part of the broader tokenized stocks market, traded at $799.72, down 3% over the previous 24 hours, according to CoinMarketCap. The tokenized instrument follows a different trading schedule than Nasdaq-listed STX. Therefore, its 24-hour percentage change and the equity’s regular-session move cover different trading periods and are not equivalent measures.