Western Digital runs out of HDD capacity as AI demand surges

Western Digital's CEO confirms all HDD capacity is sold out through 2026, with firm orders extending to 2028. AI and cloud demand has pushed hard drive prices to two-year highs as data centres scramble for storage.

Western Digital has run out of Hard Disk Drive capacity through 2026, with CEO Irving Tan confirming the company is sold out to its top customers as artificial intelligence and enterprise demand consumes storage at unprecedented levels. The shortage has driven HDD prices to their highest point in two years, according to wccftech.com, which reported on Western Digital's Q2 earnings call.

Firm orders through 2028

Speaking during the company's Q2 earnings call, Tan revealed the extent of Western Digital's committed capacity. "As we highlighted, we're pretty much sold out for calendar 2026. We have firm POs with our top seven customers. And we've also established LTAs with two of them for calendar 2027 and one of them for calendar 2028," he said. These long-term agreements combine both volume commitments measured in exabytes and pricing structures.

The shortage reflects a fundamental shift in Western Digital's business model. Cloud revenue now accounts for 89% of total revenue, whilst consumer revenue has dropped to just 5%. This dramatic change highlights how AI infrastructure demand is reshaping the storage industry.

Why AI needs massive storage

Artificial intelligence applications require enormous amounts of data storage across multiple stages of operation. Cloud service providers rely on cost-effective HDDs for storing scraped web data, processed data backups, inference logs, and training datasets that scale into exabytes. Unlike SSDs, HDDs provide a more economical solution for the massive storage requirements of modern data centres.

The scale of this demand becomes clear when considering that major AI companies are processing and storing data measured in exabytes—equivalent to millions of terabytes. This has created unprecedented pressure on storage suppliers, with Western Digital's situation mirroring broader supply constraints affecting the entire industry.

Regional implications

Whilst Western Digital hasn't specified UAE pricing or availability impacts, the global HDD shortage could affect regional cloud infrastructure development and enterprise projects. The UAE's growing digital economy, particularly initiatives like du's sovereign hypercloud and expanding data centre capacity, may face increased procurement costs and potential supply delays.

Local enterprises and government entities pursuing AI initiatives could encounter higher storage costs and longer lead times for HDD-based infrastructure. Given the UAE's focus on digital sovereignty, this supply constraint highlights the importance of securing reliable storage partnerships.

Frequently Asked Questions

Why is Western Digital running out of HDDs?

Western Digital is experiencing an HDD shortage due to surging demand from AI and enterprise sectors, particularly cloud service providers requiring cost-effective storage for exabyte-scale data centres.

What is driving the demand for HDDs?

Massive data requirements for AI processing, scraped web data, processed data backups, and inference logs in data centres are driving demand for cost-effective HDDs over more expensive SSD alternatives.

How long will the HDD shortage last?

Western Digital has firm purchase orders through calendar 2026 and long-term agreements extending to 2027 and 2028, indicating the shortage will continue for several years.

What is the impact of AI on storage supply?

AI's immense data needs are consuming significant storage capacity, leading to supply constraints and price increases across the storage industry, with HDDs reaching two-year price highs.

How does this affect enterprise customers?

Enterprise customers face longer procurement timelines, higher prices, and potential capacity allocation challenges as Western Digital prioritises existing long-term agreements with major cloud providers.