Western Digital has lost the capacity to manufacture HDDs because all resources are occupied by AI.

Western Digital reports a shortage of HDD capacity

The world's largest hard disk drive (HDD) manufacturer announced that it is experiencing a serious shortage of inventory for new device production. The level of consumer products in the company’s portfolio has dropped to just 5 % – almost all production is now allocated to the corporate segment and the artificial intelligence (AI) market.

Why demand is rising
The AI boom “consumes” DRAM and NAND memory chips, but analysts warned several months ago that shortages would also affect traditional HDDs.

Price data confirm this trend: drive prices have risen to their highest level in two years. The main demand comes from the United States and China.

Management statement
In a telephone meeting on Q2 results, CEO Irving Tan emphasized that “almost all inventory for 2026 is sold out.”

The company already has fixed orders from seven of its largest clients. In addition, long‑term agreements have been signed:

* two clients – 2027,
* one client – 2028.

Contracts include volumes in exabytes as well as pricing terms.

Financial profile
The Vice President for Investor Relations reported that revenue from cloud services accounts for 89 % of total revenue, while income from consumer services is only 5 %.

AI requires massive data sets for training that must be stored. Cloud solution providers increasingly use HDDs because they are cheaper and more reliable than SSDs.

Volumes of processed information in data centers reach exabytes (millions of terabytes). This volume includes collected web content, backups, transaction logs, and other data.

Conclusion:

Western Digital is facing an HDD capacity shortage due to growing demand from the corporate segment and AI. The company is already tied to major clients for 2026–2028, and most of its revenue is generated in the cloud sector where HDDs remain a critically important infrastructure component.