Bernstein: TDK Deal Threat Overestimated, Seagate and Western Digital Wrongly Sold Off

According to TechFlow Research, a Bernstein report dated October 7, 2026 noted that following Bloomberg's report on Seagate and Toshiba vying for TDK's head business, Seagate fell 9% and Western Digital dropped 7%. Bernstein estimates that TDK holds a 15% to 20% market share in the global hard disk drive head market. If Toshiba absorbs 70% to 90% of TDK's production capacity alone, the remaining output would only cover 1% to 7% of the combined head demand from Seagate and Western Digital. Bernstein maintains an Outperform rating on both Seagate and Western Digital, with target prices of $1,350 and $770, respectively. Bernstein believes that three market concerns regarding the TDK transaction are overstated, citing regulatory, financing, and supply obstacles that could impede the deal's execution. The vast majority of hard drive heads used by Seagate and Western Digital are manufactured in-house, limiting their reliance on TDK. Bernstein recommends buying on weakness, with Seagate as the preferred choice.