Hard Disk Drive Unit Shipments Could Grow To Support AI Workloads

Hard Disk Drive Unit Shipments Could Grow To Support AI Workloads

The hard disk drive (HDD) industry, long considered a mature sector overshadowed by flash storage, is experiencing a revival driven by the data requirements of artificial intelligence. While major manufacturers have recently pivoted their reporting to emphasize total storage capacity over unit counts, new infrastructure expansions suggest a coming surge in the volume of drives shipped.

According to Coughlin Associates, HDD unit shipments are projected to increase by 1.2% from 2025 to 2026, following an estimated 0.4% increase from 2024 to 2025. Median long-term projections suggest growth of about 11% between 2026 and 2030. However, analysts indicate that recent capacity expansions at manufacturing sites could push that growth as high as 30% by the decade's end.

Manufacturing Expansions and Technical Shifts

A primary indicator of this growth is the expansion of critical component production. Seagate is increasing its HDD head facility in Bloomington, Minnesota, expanding its clean room space from 11,000 square feet to 19,000 square feet. Because magnetic heads are a gating factor in drive production, this expansion is expected to increase unit production capacity by late 2027 or 2028.

These new facilities are presumed to produce heat-assisted magnetic recording (HAMR) heads, which integrate lasers to heat magnetic recording media. TDK, a manufacturer that supplies heads to Toshiba and occasionally to Western Digital and Seagate, also announced in April that it is increasing its head production capacity.

The industry is currently navigating different technical paths to increase capacity:

• Western Digital (WD): Utilizing a dual-path approach with ePMR and HAMR. WD has increased disk and head counts in drives up to 11, with plans to reach 14. The company's 40TB UltraSMR ePMR HDD is in qualification with two hyperscale customers for volume production in the second half of 2026. HAMR production is slated to ramp in 2027, with a roadmap targeting 100TB by 2029.
• Seagate: Focusing on 10 disks per drive and has already begun shipments of HAMR technology to push storage beyond 30 terabytes per drive.

The AI Data Engine

The demand for HDDs is tied to the "voracious consumption" of digital storage by AI. Large-scale AI models require exabytes of data for training, and the rise of AI inference—the process of a model generating an answer to a query—is creating further constraints. This process often relies on retrieval-augmented generation (RAG), which increases storage requirements.

The scale of this data generation is evident in consumer tools; Google reported that 100 million AI-generated videos were created within three months of the May launch of its Flow video tool. Furthermore, Google is processing more than 1.3 quadrillion tokens per month, compared to 10 trillion a year ago.

Economic factors sustain the HDD's relevance. While solid-state drives (SSDs) offer better performance, HDDs currently account for 80% to 90% of total data center storage capacity due to their lower total cost of ownership. WD noted that flash storage carries a cost premium of 6-10x compared to HDDs.

"You don't have AI without data, and you don't have data without storage."

Kris Sennesael, finance chief at Western Digital, via TechSpot

Supply Constraints and Market Volatility

Despite the growth, the industry faces significant bottlenecks. TrendForce predicts severe shortages in high-capacity HDDs next year, with lead times potentially surging from weeks to more than a year. This has led some data centers to shift cold storage to SSDs.

Market dynamics are shifting as WD and Seagate move away from volatile spot markets toward longer-term supply deals, sometimes locking in pricing for a year or more. This stability has contributed to industry gross margins doubling over the last two fiscal years to approximately 40%. Revenue growth has also spiked; in the latest quarter, Western Digital reported shipping 190 exabytes, a 32% increase year-over-year, while Seagate shipments grew by 45%.

Future Outlook

The industry is preparing for a multi-tiered storage future. Dell’Oro Group projects the overall storage drive market (HDDs and SSDs) will grow at a compound annual growth rate of over 20% over the next five years.

Next steps for the industry include the 2027 launch of WD's intelligent software layer API to help mid-scale customers achieve hyperscale economics, as well as the arrival of 256-terabyte QLC SSDs in 2028. In the immediate term, analysts suggest that buyers treat SSD procurement similarly to GPUs by multi-sourcing and locking in lanes early to avoid the tight supply conditions expected by 2026.