In context: Western Digital is one of the few remaining hard disk drive manufacturers in the world. According to its latest earnings call, the company now does most of its business with AI data center providers – and they are purchasing as many HDDs as possible, years ahead of schedule.
Western Digital has already sold out its entire HDD manufacturing capacity for the year, and it's only February. According to CEO Irving Tan, 2026 is effectively fully booked. AI companies are purchasing storage drives that have yet to be manufactured, and relief for traditional customers is unlikely anytime soon – not within the next couple of years, at least.
Tan disclosed the supply crunch during the company's latest quarterly earnings call. Revenue rose 25 percent year over year to $3.02 billion, and the third quarter is projected to climb even higher, with a 40 percent YoY increase. Western Digital is successfully meeting surging demand from the AI-driven data economy, Tan said, ramping up production of high-capacity HDDs at an unprecedented scale.
The company's production capacity is already sold out through 2026, with most units allocated to its top seven customers. In addition, Western Digital has signed long-term agreements with two of those top customers for 2027 and with one for 2028. These unnamed companies have collectively pre-purchased several exabytes of storage capacity, Tan confirmed.
Together with Seagate and Toshiba, Western Digital is one of just three remaining HDD manufacturers in a market now dominated by solid-state storage and high-bandwidth NVMe performance. Big Tech's growing appetite for AI data centers is having a profound impact on traditional magnetic storage, after previously straining global supplies of SSDs and other memory-based products.
Western Digital recently exited the SSD market to focus exclusively on hard disk drives. The traditional spinning disks are not ready for retirement just yet, as both Western Digital and Seagate continue working to significantly increase data density and transfer speeds.
Western Digital now sells the vast majority of its HDDs to enterprise customers. Cloud clients account for 89 percent of the company's revenue, while traditional consumers make up just five percent.
According to CFO Kris Sennesael, demand for data center solutions is expected to continue rising. Enterprise customers are adopting high-capacity HDDs at scale, strengthening the company's profitability in an increasingly unpredictable AI-driven market.