Western Digital’s 2026 capacity is already spoken for, with multi-year supply agreements now reaching into 2028–2029 and early discussions reportedly touching 2030.
Following strong results from SanDisk spun off from WD last year, Western Digital signaled similarly solid momentum, securing multiple long-term supply agreements. According to Barron’s and an Investing.com earnings transcript, the company is in active talks with customers to extend contracts further, with some even inquiring about supply availability into 2030.
CFO Kris Sennesael said demand across data and memory markets is broadly strengthening, driven by AI. As workloads transition from training to inference, data generation is accelerating. At scale, much of this expanding data footprint will reside on HDDs, while hyperscalers optimize placement across SSDs, HDDs, and other storage layers to balance cost and performance.
CEO Erving Tan noted that WD has firm purchase commitments from its seven largest customers through 2026. The company has also finalized commercial agreements with three of its top five clients, with terms running through 2027 and 2028.
Sennesael added that WD’s 2026 production capacity is effectively fully allocated. Discussions are ongoing to extend additional contracts into 2028 and 2029, structured around committed exabyte volumes and agreed pricing.
Margin Expansion and 100TB Roadmap
At its February 3 Innovation Day, WD projected annual revenue growth above 20% over the next three to five years, targeting gross margins exceeding 50%.
Tan emphasized that HDDs continue to anchor hyperscale storage, accounting for roughly 80% of cloud data. Once viewed as a cyclical market, the HDD segment is now increasingly supported by AI-driven demand, which WD considers a durable growth catalyst.
Rather than simply shipping more units, WD and rival Seagate are focusing on boosting storage density. The company outlined a roadmap to deliver a 100TB HAMR-based drive by 2029, leveraging heat-assisted magnetic recording to significantly expand capacity.
Financially, WD reported a standout Q2 FY2026, with net income surging 210% year-over-year to $1.8 billion. Revenue rose 25% to $3.017 billion, while gross margin reached 45.7%.
