Seagate Technology saw its shares decline 7.5% on Monday following comments from Chief Executive Officer Dave Mosley at the JPMorgan Global Technology, Media and Communications Conference. Mosley signaled that the company does not plan to add greenfield manufacturing capacity in response to the surge in demand for memory storage, arguing that new factories would require too much time to bring online and could leave the company with excess capacity.
When questioned about whether Seagate intended to expand manufacturing to satisfy growing demand for memory chips, Mosley warned that new plants would "take too long" and might create a situation in which the company had more capacity than necessary. He stressed that Seagate's strategy is to deliver exabyte growth primarily through moves across technology nodes rather than by increasing the number of manufacturing sites.
Mosley detailed specific supply-chain timing factors that constrain rapid capacity additions. He said key components, particularly recording head wafers, carry lead times of more than nine months, and that assembling drives adds roughly another quarter to production timelines. To manage these constraints, Seagate has shifted to a build-to-order approach that offers customers visibility four to five quarters into the future.
"If we took the teams off and started building new factories or bringing up new machines that would just take too long, you end-up more capacity, if you will, but then you’d slow the rate of growth on that technology," Mosley said during the conference.
Rather than pursue broad capacity expansion, Mosley said Seagate is focusing on extracting more exabytes from existing lines by advancing product areal density and adding selective tools to strengthen throughput. The company is pursuing transitions that it expects to move average capacity per platter from about 3 terabytes to 4 and 5 terabytes as part of a plan that targets mid-20s percent compound annual growth rate (CAGR).
Mosley also acknowledged that current demand outstrips Seagate's available supply, with customers asking for greater exabyte delivery. He indicated, however, that expanding unit capacity in a material way would only be sensible if new application classes - such as Edge AI - emerge and broaden demand beyond traditional data center workloads.
On the technology front, Seagate has qualified its Mozaic 3 HAMR technology at all planned cloud service providers and expects to hit a 50% exabyte crossover to HAMR in the second half of calendar 2026.
Market reaction: The company's stock declined sharply after Mosley's remarks, reflecting investor concern about the company's decision not to rapidly scale factory footprint despite robust demand for storage capacity.