Seagate CCO: Storage Price Hikes Are ‘the New Normal’ Amid AI-Driven Supercycle
Key Facts
- Seagate Chief Commercial Officer Ban-Seng Teh described memory price hikes as “the new normal,” citing an unprecedented AI-driven “supercycle” with no signs of historical shortage-to-oversupply recovery.
- Server DRAM contract prices are forecast to surge roughly 90% quarter-over-quarter in Q1 2026, revised upward from an earlier 55-60% estimate, according to TrendForce.
- PC DRAM prices are also expected to more than double in the same period, setting new records.
- Seagate has begun shipping its Mozaic 4+ platform hard drives using heat-assisted magnetic recording (HAMR) technology, with capacities up to 44TB, to two unnamed hyperscale cloud providers.
- Seagate’s nearline hard drive capacity is on allocation through the end of 2026, with supply agreements extending into 2027.
Lead paragraph
Seagate’s Chief Commercial Officer Ban-Seng Teh has declared that rising storage and memory prices are now “the new normal” for the industry, fueled by explosive demand from AI data centers that has pushed the sector into what he calls a “supercycle.” In an interview with the South China Morning Post, Teh noted the current market conditions are “very unusual” because past cycles of shortage and oversupply have not materialized. The comments underscore how the AI boom is reshaping the storage landscape, with Seagate’s own nearline HDD capacity already allocated through 2026 and major cloud customers locked into agreements extending to 2027.
Body
The storage industry has historically operated in boom-and-bust cycles, but the surge in AI-related data generation appears to have broken that pattern. Teh told the South China Morning Post it is “hard to tell if it will last forever,” highlighting the departure from traditional market behavior. According to TrendForce, the supply-demand imbalance has grown so severe that analysts revised their Q1 2026 server DRAM contract price forecast upward from 55-60% to approximately 90% quarter-over-quarter — the steepest single-quarter increase on record. PC DRAM prices are projected to more than double over the same period.
Seagate itself is feeling the effects of these rising costs. Teh confirmed the company has “definitely seen increasing costs” from spiraling DRAM prices, although he noted Seagate’s DRAM consumption is modest compared to PC manufacturers or hyperscale data center operators. Beyond memory, external factors are adding pressure. Volatile oil prices linked to conflict in the Middle East — with crude briefly reaching a four-year high near $120 per barrel before retreating below $100 — have complicated logistics, prompting Seagate to review its shipment routing.
Despite these headwinds, Seagate is capitalizing on the same AI demand wave driving up component prices. Teh revealed that annual growth in data storage demand, which the company expected to remain below 20% five years ago, is now expanding in the mid-20s percentage range. This sustained growth has accelerated the industry’s push toward higher areal densities. In a significant technical milestone, Seagate began shipping its next-generation Mozaic 4+ platform this month. The platform employs heat-assisted magnetic recording (HAMR) technology and delivers capacities of up to 44TB per drive. The initial shipments are going to two major, unnamed hyperscale cloud providers.
Seagate CEO Dave Mosley reinforced the strength of demand, stating that the company’s nearline hard drive capacity remains on allocation through the end of 2026. Supply agreements with key cloud customers extend into 2027. The combination of allocation constraints and multi-year commitments suggests that relief from elevated storage prices is unlikely in the near term for either enterprise buyers or consumers.
The broader market has taken notice of Seagate’s positioning in the AI storage boom. Following a strong fiscal second-quarter earnings report that exceeded Wall Street expectations, Seagate Technology Holdings (NASDAQ: STX) shares surged 19%, according to multiple financial reports. Analysts point to the diverging cost-per-terabyte between HDDs and SSDs, with enterprise HDDs maintaining a roughly 7:1 price advantage for bulk storage as of 2026. This economic reality continues to make high-capacity hard drives the preferred solution for the massive “data lakes” required by AI training and inference workloads.
Impact
For developers and cloud service providers building large-scale AI infrastructure, the message is clear: storage costs are likely to remain elevated as a structural feature of the AI era rather than a temporary spike. Companies that relied on periodic price drops after oversupply periods may need to revise their capital expenditure models. Hyperscalers have responded by pulling orders forward to secure capacity, further tightening the market and contributing to the revised DRAM price forecasts.
The storage industry’s shift also highlights the growing importance of the data storage layer in the AI stack. While much attention has focused on GPU compute power, the exponential growth in training datasets, model checkpoints, and inference logs has created unprecedented demand for high-capacity, cost-effective storage. Seagate’s ability to ship 44TB HAMR drives into hyperscale environments positions the company as a key enabler of the AI infrastructure buildout.
Consumers and smaller enterprises are likely to feel the downstream effects through higher prices for both enterprise storage solutions and, eventually, consumer hard drives. With nearline capacity allocated years in advance, channel partners and system integrators may face continued supply constraints and pricing pressure.
What's next
Seagate’s Mozaic 4+ platform rollout is expected to continue ramping through 2026, helping address some of the capacity shortfall, though demand continues to outpace supply. The company’s focus on higher areal densities through HAMR technology will be critical to meeting the mid-20s percentage annual growth in storage demand that Teh described.
Industry watchers will be closely monitoring whether the current supercycle eventually moderates or whether AI-driven data growth permanently alters the economics of the storage market. TrendForce’s aggressive upward revision of DRAM price forecasts for Q1 2026 suggests the supply-demand imbalance may worsen before it improves. Seagate has not provided specific guidance on when — or if — pricing pressure might ease, with Teh characterizing the current environment as the new normal.
Longer term, the industry may see further innovation in both HDD and SSD technologies as cloud providers seek to balance performance, capacity, and cost in their AI data centers. For now, however, the combination of record DRAM price increases, HDD allocation through 2026, and sustained AI demand points to continued elevated storage costs across the board.
Sources
- Tom's Hardware - Seagate CCO says storage price hikes are ‘the new normal’
- South China Morning Post - Memory price hikes ‘the new normal’ as AI boom fuels storage demand, Seagate says
- FinancialContent - The AI Storage Pivot: Seagate Shares Rocket 19% as Hard Drive Demand Hits Unprecedented Peaks
- FinancialContent - Seagate Technology (STX): The Storage Supercycle and the AI Data Lake Revolution