Toshiba plans to invest about ¥60 billion to expand its hard disk drive (HDD) production base in the Philippines, aiming to double HDD capacity for AI data centers in fiscal 2027 compared with fiscal 2025. This will be the HDD division's first large-scale investment in about five years. Its Philippine subsidiary TIP has added a nearline HDD production line at Laguna Technopark and completed its first shipment, marking a stage of substantive progress in capacity expansion.

The direct backdrop to Toshiba's expansion is surging data storage demand from AI infrastructure buildout. As AI training and inference continue to scale, cloud service providers' purchases of nearline HDDs have risen sharply. Western Digital's 2026 HDD capacity is already sold out, with only about 5% going to the consumer market; Seagate's nearline storage capacity is also fully booked, with some customer demand plans extending to 2029 and beyond.

Notably, although SSDs far outperform HDDs in read/write speed, their cost per unit capacity continues to rise. Data shows that the average price of 30TB enterprise-grade TLC SSDs is as high as about $22,600, while the average price of same-capacity HDDs is only about $1,216. SSD prices have reached nearly 18.6 times those of HDDs, previously exceeding 23 times. This cost gap keeps data center customers relying on HDDs for exabyte-scale storage.

Doubling Capacity and Share Target

By storage capacity, Toshiba currently holds slightly more than 10% of the HDD market, with a mid-term goal of raising this to 30%. To achieve this leap, in addition to doubling capacity, Toshiba plans to produce new products at its Philippine plant, increasing single-drive storage capacity by up to 40%, and to advance automation of inspection and cleanroom operations, which is expected to reduce additional hiring needs by about 40% while improving yield. Further ahead, Toshiba aims to mass-produce 65TB-class HDDs by 2030 and ultimately achieve mass production of 100TB-class products.

However, jumping from 10% to 30% is not easy. Seagate and Western Digital have deep roots in nearline storage, with mature customer relationships and long-term supply agreements. Toshiba needs to win the trust of more leading cloud service providers while ramping up capacity. In addition, Toshiba previously participated in bidding for TDK's head business to secure key component supply.

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