Investing.com -- Analysts pushed back Friday on concerns that Toshiba’s planned expansion of hard disk drive production could materially ease the global HDD supply shortage, arguing that the investment is unlikely to significantly change the industry’s supply-demand balance.

Toshiba plans to invest about ¥60 billion ($380 million) to double its HDD production capacity by fiscal 2027, according to Nikkei. The expansion is aimed at meeting growing demand for storage from AI data centers.

The news sent Seagate Technology shares down 13% and Western Digital shares down 12% Friday, after both stocks had already posted massive gains this year. .

Citi analyst Asiya Merchant said Toshiba’s expansion may have a limited impact on overall HDD supply because the company relies on external suppliers for key components such as media and heads. Those suppliers would also need to significantly increase their own capacity for Toshiba to double its output, potentially limiting the amount of additional HDD capacity reaching the market.

LYNX Equity Strategies also argued that the investment is unlikely to make a meaningful dent in the global supply shortage relative to demand. The firm said it believes Toshiba’s investment is more likely intended to address a domestic HDD shortage in Japan than to aggressively pursue global market share from Seagate and Western Digital.

LYNX noted that Japanese companies have historically tended to make large investments to protect domestic supply rather than pursue global market share, and said it expects HDD stocks to attract buyers following the current selloff.

SanDisk was little changed Friday. LYNX said the muted reaction was appropriate, noting that its checks indicate Kioxia’s wafer capacity is sold out for all of 2027 and is likely to remain sold out through 2028.

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