Memory chipmakers shares tumbled following cautious remarks from Seagate's CEO regarding industry production capacity amid the AI-driven demand surge. Seagate shares plunged over 10%, dragging down Micron (-8%), SanDisk (-9%), and Western Digital (-8%). Investors are increasingly concerned about the industry's ability to keep pace with the growing requirements of AI-dedicated data centers.
Speaking at a JPMorgan conference, Seagate CEO Dave Mosley explained that rapidly scaling up production capacity remains particularly complex. According to him, building new facilities and installing new equipment would take too long and could potentially hinder the group's technological advancements. These comments reignited fears over the long lead times inherent in the semiconductor industry, at a time when memory chips have become essential to the development of artificial intelligence infrastructure.
The sector had rallied strongly in recent months, on the back of massive AI investments. However, Dave Mosley pointed out that Seagate must manage extensive production cycles and maintain visibility several quarters ahead for its customers. The executive indicated that the company is seeking to secure visibility on four to five quarters of available capacity, while acknowledging that demand continues to significantly outstrip current production capabilities.
Seagate Technology Holdings plc is the world's leading manufacturer of data storage systems. Its products are sold under the Seagate, LaCie, Lyve, MACH.2, and Mozaic brands. Net sales break down by family of products as follows:
- mass data storage systems and platforms (81%): designed for data centers, cloud storage servers, and large cloud infrastructures.
- internal hard drives and external storage systems (12%): hard disk drives (HDDs) and solid-state drives (SSDs) designed for PCs, laptops, consumer electronics, etc.
- other (7%): including data recovery, restoration, and migration services.
Net sales break down by channel of distribution between original equipment manufacturers (80%), resellers and enterprises (11.7%), and independent distributors (8.3%).
At June 27, 2025, the group had 7 production sites located in the United States, Thailand (2), Ireland, Malaysia, Singapore, and China.
Net sales are distributed geographically as follows: the United States (48.5%), Singapore (41.3%), and the Netherlands (10.2%).
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