Western Digital has confirmed that its full manufacturing capacity for 2026 is already reserved, despite the year having just begun.
The backlog is primarily driven by artificial intelligence demand. During the latest quarterly call, CEO Irving Tan noted that AI data center providers are reserving storage years ahead, effectively securing supply through the end of next year.
“2026 is effectively fully booked,” Tan said, adding that traditional customers shouldn’t expect much relief in the next few years.
Rising demand comes as Western Digital leans further into the enterprise market. Cloud customers represent 89 percent of its revenue, compared to five percent from traditional consumers. With its exit from SSDs, the company now focuses entirely on hard drives, where it competes with Seagate and Toshiba.
The financial results underscore the transition. Revenue climbed 25 percent year over year to $3.02 billion, and the company expects a further 40 percent jump this quarter. Tan credited the gains to what he called the “AI-driven data economy,” adding that Western Digital is scaling up production of high-capacity HDDs at levels it hasn’t seen before.
Almost everything the company plans to make through 2026 is already spoken for by its top seven customers. It’s also locked in long-term deals with two of them for 2027 and one for 2028. Tan noted that together, these clients have pre-bought several exabytes of capacity.
CFO Kris Sennesael said the trend shows no signs of slowing. “Enterprise customers are adopting high-capacity HDDs at scale, strengthening the company’s profitability in an increasingly unpredictable AI-driven market,” he said.
The shortage highlights how much the industry has evolved from its PC- and consumer-focused roots. Although SSDs and NVMe performance dominate consumer storage today, AI workloads are driving renewed interest in magnetic hard drives. Western Digital and Seagate are working to increase data density and boost transfer speeds to maintain the relevance of HDDs.
For now, any customer not already locked into a contract with Western Digital may find themselves waiting, possibly well into 2027.
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