Western Digital will pour US$1 billion ($1.5 billion) into Japan over the next five years, stepping up its push to supply the booming AI data centre market.

CEO Irving Tan said the investment through to 2030 marks a “material increase” from prior periods, targeting advanced hard-disk drive (HDD) technologies, manufacturing processes, and new research partnerships.

Much of the work will run through Western Digital’s Fujisawa R&D hub south of Tokyo, which Tan described as one of the company’s most crucial innovation sites.

Japan remains critical to the US company’s supply chain. In fiscal 2025, the company spent US$1.5 billion ($2.34 billion) with Japanese suppliers, representing 40% of global procurement.

That’s a figure Tan expects to rise.

All those data centres now being hastily constructed will need HDDs

The global HDD market has consolidated into three major players: Western Digital, Seagate, and Toshiba. Western Digital led with a 41% share in 2024, a nose ahead of Seagate’s 40%.

Western Digital spun off its flash memory arm, SanDisk, earlier this year to sharpen its focus on drives.

AI adoption is reshaping storage demand. Western Digital’s cloud-focused division now accounts for 90% of sales.

The company is racing to commercialise heat-assisted magnetic recording technology, aiming to expand capacity from today’s 32TB products to 100TB.

HDDs continue to dominate data centres, with Tan noting that they store around 80% of global data, thanks to their lower cost per terabyte.

Fast SSDs (Solid-State Drives) dominate in laptops and desktops, but when it comes to storing vast amounts of AI data, Western Digital’s latest investment shows that hard drives still carry most of the load.

“Today, 80% of the data stored in data centres is on hard-disk drives,” Tan said. “Because of the movement of data, the economics, and obviously the reliability of hard drives, the best total cost of ownership… HDDs will be the predominant storage media for quite a while.”