Author: Peng Cheng
In the digital era, before solid-state drives (SSDs) became fully adopted, hard disk drives (HDDs) remained the most widely used medium for data storage. However, this critical sector has long been monopolized by companies such as Seagate and Western Digital, which not only keeps domestic prices high but also places China's IT industry chain in a passive position within the global supply chain. Previously, after Huawei was sanctioned and restricted from purchasing foreign products manufactured using U.S. technology, the U.S. Department of Commerce took the opportunity to heavily fine Seagate for supplying HDDs to Huawei, cutting off Huawei's stable procurement channels from mainstream international HDD suppliers and causing significant turbulence in China's related industries.
Zhou Yuefeng, Senior Vice President of Huawei, CEO of Huawei Cloud, and President of the Data Storage Product Line, pointed out that across the entire Chinese IT industry chain, the HDD is the only core storage component that has not yet achieved complete autonomous domestic production. As the construction of data centers and AI (Artificial Intelligence) infrastructure accelerates, the supply security and technological autonomy of HDDs are receiving increasing attention.
01. The HDD Market Is Not Shrinking, But Growing Larger
A prevalent market view holds that once SSD technology matures, HDDs will become a sunset industry with continuously shrinking market size and slim profit margins, eventually being completely replaced. However, facts have proven that the HDD market has not only failed to shrink but has even reached new highs.
Massive warm and cold data storage scenarios require a large number of HDDs. AI large model training generates massive raw materials and derivative data. 4K/8K high-definition surveillance, IoT (Internet of Things) and autonomous driving data retention, and archive-level data archiving for finance, healthcare, and government enterprises all have a strong demand for long-term storage with large capacity, low cost, and high reliability, and the demand for HDDs will continue to grow. In contrast, SSDs have a higher unit storage cost, and based on the physical principle of charge storage, their data reliability for long-term offline storage is weaker than that of HDDs; data is easily lost and difficult to recover after prolonged power outages. SSDs are more suitable for scenarios with high read/write speed requirements and no need for long-term cold storage. HDDs and magnetic tapes remain the optimal choices for cost-effectiveness and reliability.
The capacity expansion actions of the global upstream supply chain also directly confirm the growth expectations of the HDD market.
In May 2026, TDK, a leading manufacturer of magnetic heads and head suspensions, announced capacity expansion, focusing on meeting the growing demand for nearline hard drives in AI data centers, while increasing R&D and production line investments in next-generation heat-assisted magnetic recording (HAMR) heads. Among them, for the head suspension responsible for fixing the magnetic head and ensuring its stable suspension at a height of several nanometers, TDK will focus on expanding the production capacity of tri-stage actuators (Tri-SA) dedicated to ultra-high-capacity hard drives; it is expected that the annual production capacity of hard drive magnetic heads will increase by about 50%, and the suspension capacity will rise by 22%.
In the same month, Resonac, the largest storage platter supplier for the world's top three hard drive manufacturers, announced the expansion of magnetic recording platters—one of the most core components of hard drives, which uses aluminum or glass substrates as the base and is plated with a magnetic film on the surface, serving as the core carrier for heat-assisted magnetic recording and microwave-assisted magnetic recording technologies to increase storage density. Resonac will build its Singapore subsidiary into a global core production base, increasing the annual production capacity of platters from 160 million to 210 million, an increase of about 31%, with the new production line planned to be put into operation in 2027.
HOYA, a leading global supplier of glass substrates for hard drives, announced an investment of approximately 50 billion yen to build a new hard drive glass substrate factory in Vietnam. HOYA currently has two hard drive glass substrate factories in Vietnam and one in Laos. The new factory is expected to be put into operation in 2028, at which time the total number of HOYA's global hard drive glass substrate factories will reach four.
In addition, sputtering target manufacturer JX Advanced Metals has also announced a capacity expansion plan. Targets are key raw materials required for depositing magnetic films during the manufacturing process of hard drive storage platters. As heat-assisted magnetic recording technology increases storage density, the demand for targets will continue to rise. The company's new production line at its Isohara plant will be put into operation in phases in the second half of this year.
02. Past Attempts: The Rise and Fall of Domestic HDDs
Many people may not know that China has actually manufactured mechanical hard drives, going through multiple attempts, but ultimately failing one after another.
The first exploration was the industry's start and early OEM. In 1970, the state-owned Jiannan Machinery Factory (Factory 4507) was established in Huaihua, Hunan Province. China's first computer peripheral equipment production line, the first domestically produced computer hard drive, and the first set of floppy disk drives were all born here. In 1985, Jiannan Machinery Factory established a joint venture in Shekou, Shenzhen, to act as an OEM for American Conner hard drives, mass-producing hard drive magnetic heads, all of which were exported to Singapore and Malaysia for hard drive assembly. By 1993, a total of 25 million magnetic heads were exported, generating $240 million in revenue. The factory once attempted to manufacture domestic hard drives but ultimately failed, and subsequently remained in the OEM segment of magnetic heads and platter substrates for a long time.
The second exploration was the surge of independent brands and joint venture transformation. In 1999, Great Wall Group launched the first 8.6GB high-speed hard drive independently produced in China, which was regarded by the media as a major breakthrough in China's computer core component manufacturing technology. At that time, the magnetic head production of Shenzhen Kaifa Technology Co., Ltd., under Great Wall Group, had firmly ranked third globally, supplying international giants such as IBM and Seagate. In August 2000, Great Wall hard drives were officially launched, and sales exceeded 50,000 units in October of the same year. However, this situation did not last long. Due to frequent quality accidents, the Great Wall hard drive market gradually declined afterwards.
Faced with the crisis, Great Wall chose not to persist in independent R&D, but turned to OEM cooperation, introducing IBM's production lines and technology. In 2001, Great Wall Group established the ExcelStor brand in a Sino-foreign joint venture model, launching the Jupiter, Mars, and other series of mechanical hard drives, which created a considerable market share for a period of time. In 2007, the production and sales of the restructured ExcelStor hard drives exceeded 20 million units, with customers covering more than 50 countries and regions worldwide. When mechanical hard drives were the mainstream at that time, ExcelStor was once brilliant. Its website could see the self-proclaimed "China's No. 1 Hard Drive." After several years of development, it had become an international brand that could stand shoulder to shoulder with Seagate, Western Digital, Hitachi, and Samsung.
But the good times did not last long. Because ExcelStor adopted IBM's "high-density glass platter technology," which had serious defects, it led to frequent bad sectors and an extremely high repair rate. This not only caused the collapse of IBM's hard drive business, which was acquired by Hitachi, but also resulted in dismal sales of ExcelStor hard drives and the collapse of brand reputation. In December 2007, U.S. Iomega reached an equity swap merger and acquisition agreement with ExcelStor valued at $306 million, but this deal ultimately fell through. Afterwards, ExcelStor continued to operate as a manufacturing base for a period of time, but its own hard drive brand had lost its competitiveness. In 2014, Shenzhen ExcelStor Technology was officially deregistered, completely drawing the curtain on the early exploration of domestic mechanical hard drives.
The third exploration was the breakthrough in a segmented track—micro hard drives. In 2002, Nanfang Huitong and U.S. Riospring established a joint venture to produce 1.0-inch and 1.8-inch micro hard drives in Guiyang, Guizhou Province, applied to devices such as digital cameras, MP3 players, and PDAs. In 2003, it took the global lead in launching 1-inch micro hard drives with capacities of 2.4GB/4.8GB. Its sales topped the world in the fourth quarter of that year, briefly surpassing Hitachi. But the good times did not last long. In 2004, Hitachi Global Storage Technologies sued Nanfang Huitong in the United States for infringing on four micro hard drive patents. Coupled with the enterprise's own capital chain rupture, loss of control over sales channels, and internal friction among shareholders, this project was ultimately declared a failure.
The history of domestic mechanical hard drives is one of starting early but arriving late. Reviewing the failures of the three explorations, the core crux is highly consistent: essentially taking the route of "introducing foreign production lines + technology licensing" rather than underlying independent R&D. Core technologies such as magnetic head design, platter material formulations, servo motor control, and main control chip algorithms have always been firmly blocked by international giants. Once the technical route of overseas original manufacturers has defects, or giants initiate technology iteration and launch price wars, domestic manufacturers have no power to fight back. Mechanical hard drives span multiple high-end technical fields such as precision metal processing, magnetic material R&D, precision magnetic head manufacturing, and chip and control algorithms. The larger the capacity, the higher the technical threshold. Developed to this day, only three players remain globally: Western Digital, Seagate, and Toshiba. The rest of the manufacturers have been eliminated or acquired due to insufficient R&D capabilities.
03. Domestic HDDs Make a Comeback
Around 2007, solid-state drives (SSDs) began to rise, with read/write speeds far exceeding HDDs. Public opinion generally believed that mechanical hard drives were a sunset industry, and resources and policies tilted towards SSDs. Although this choice was correct on the consumer end, it also led to the underestimation of the irreplaceability of HDDs in the cold storage field of data centers, thereby missing the window for catching up. After years of silence, the domestic mechanical hard drive industry sets off again. Different from the past "introduction-imitation" path, this breakthrough is a breakthrough in underlying technical principles and the industrial chain, truly making up for the shortcomings of technology and supply chain from the root.
In terms of the underlying technical route, domestic enterprises have taken a differentiated path. Recently, Dashu Jixian Technology Co., Ltd. showcased a mechanical hard drive prototype. The technical path and architecture have major breakthroughs compared to existing mechanical hard drives: bandwidth performance exceeds that by 21 times, random read/write performance improves by up to a thousand times, and it is expected that there will also be a significant reduction in costs.
The read/write structure of HDDs has long been plagued by interface friction, which not only affects equipment lifespan but also fundamentally restricts further improvement in storage density. Traditional HDDs generally adopt a mode where the magnetic head flies over the disk body and maintains a certain distance during operation. Magnetic storage technology is a near-field technology. When reading and writing magnetic information, the magnetic field strength is inversely proportional to the square of the distance between the magnetic head and the magnetic medium. In order to increase storage capacity and ensure the reliability and signal-to-noise ratio of data access, the flying height of the magnetic head has been continuously reduced, from hundreds of micrometers in the last century to a few nanometers today, approaching the limit flying height. The super-energy storage device based on structural superlubricity technology, developed by the team of Academician Zheng Quanshui, can make the magnetic head slide closely on the surface of the platter, reducing the flying height of the magnetic head to zero, realizing contact read/write of the hard drive magnetic head, thereby greatly improving the system signal-to-noise ratio and disk storage density. At the same time, the sliding mode will greatly simplify the structure, allowing multiple magnetic heads to be arranged on the disk surface, thereby multiplying the read/write speed of the disk. In addition, the contact read/write mode also makes the hard drive more resistant to vibration and collision, with higher reliability and lifespan.
At the level of full industrial chain implementation, China is also making up for the key links in the supply chain.
The full industrial chain industrialization project for high-density mechanical hard drives in Wanqingsha, Nansha, Guangzhou, has completed investment filing. It is invested and constructed by Guangzhou Vital Electronic Technology Co., Ltd., with a total investment of 10 billion RMB and a construction period from October 2026 to September 2028. The project will build a complete local industrial chain covering core hard drive materials, substrates, laser equipment, and core motors. Upon completion, it will be able to produce over 100 million glass substrates and tens of millions of laser read/write components annually, directly supplying domestic hard drive assembly and computing power server manufacturers, enhancing the independent guarantee capability of storage hardware.
In fact, Vital Group has frequently laid out in the storage field in recent years. In 2018, it acquired Heraeus (Singapore) magnetic storage target factory; in 2023, it broke through the core technology of magnetic storage targets; and in 2026, it landed the full HDD industrial chain project. The precious metal targets such as ruthenium and platinum required for HDD magnetic heads and disk media are exactly Xiandao's traditional advantages in the field of rare and scattered metals. At the same time, the Xiandao system controls multiple listed company platforms, which also provides stable capital support for long-cycle and high-investment industries such as HDDs.
From following the Western technical route to forging an independent innovation path, the breakthrough of domestic mechanical hard drives is essentially an industrial outcome jointly spawned by the upgrading of China's manufacturing industry and breakthroughs in basic scientific research. As underlying technologies continue to iterate and the full industrial chain is gradually connected, the domestic storage industry is filling the final gap.