TECH NEWS – If a major manufacturer admits that artificial intelligence is gobbling up everything, we’ll be the ones paying for it again…

According to Western Digital‘s CEO, one of the world’s largest manufacturers is starting to run out of HDD capacity as major long-term agreements (LTAs) have been signed. The current AI supercycle has disrupted supply chains – we’ve already talked about DRAM and NAND, and it now looks like demand for HDDs is also surging. WD CEO Irving Tan says the manufacturer’s entire capacity for this year is already booked. During the second quarter earnings call, Tan said the focus is on developing products that meet the needs of business customers. Given the pace of hyperscaler buildouts, it’s reasonable to expect HDD demand to keep rising.

Tan said: “As we highlighted, we’re pretty much sold out for calendar 2026. We have firm purchase orders with our top seven customers. We’ve also established LTAs with two of them for 2027 and one for 2028. Obviously, these LTAs involve a combination of exabyte volume and price.”

With major PC manufacturers shifting toward AI, it’s clear where this demand is coming from. Western Digital‘s vice president of investor relations noted that cloud-based revenue accounted for 89% of total revenue, while consumer revenue was only 5%. When the numbers are this lopsided, as in WD‘s case, it makes business sense to prioritize enterprise demand and push the client segment into the background – exactly what other manufacturers are doing as well. For Western Digital, this strategy has worked.

Demand is being driven primarily by large-scale data center construction worldwide, with the highest HDD demand concentrated in facilities located in the United States. AI is nothing without data, and cloud service providers (CSPs) use HDDs to store massive volumes because they remain the most cost-effective and efficient storage devices at scale. Data centers hold exabytes of data, including web data, processed backups, inference logs, and related datasets. Much like AI memory, HDDs have grown hugely in demand in recent years, putting pressure on suppliers.

The AI craze has created shortages across key PC components, and unfortunately this trend is likely to persist for quite some time before any meaningful easing…

Source: WCCFTech