Western Digital (WD), the world's largest hard disk drive (HDD) manufacturer, announced plans to invest US$1 billion in Japan over the next five years to strengthen next-generation HDD technology and production processes. The move aims to enhance HDD performance while expanding research collaborations and talent recruitment, reflecting Japan's continued strategic importance to WD's operations.
According to Nikkei Asia, WD's R&D center in Fujisawa City, Kanagawa Prefecture, remains one of the company's key innovation hubs. Japan also serves as a critical source for WD's supply chain, providing roughly 40% of its components. In fiscal year 2025, the company expects to spend US$1.5 billion with Japanese suppliers and partners, a figure projected to grow in the coming years. The investment comes amid surging demand for data center storage driven by widespread adoption of generative artificial intelligence (AI), with WD's cloud business unit accounting for up to 90% of revenue in the second quarter of 2025.
CEO Irving Tan emphasized that despite the rise of solid-state drives (SSDs), HDDs will remain the primary storage medium for data centers due to their cost-effectiveness, reliability, and efficiency in managing large volumes of data. WD maintains manufacturing bases in China and Thailand, and its HDDs are currently classified under the semiconductor sector, exempting them from US tariffs.
The new investment builds on WD's joint venture with Kioxia Corporation. Their collaborative manufacturing facilities at the Yokkaichi and Kitakami plants have previously received government subsidies totaling over JPY92.9 billion (approx. US$630 million) in 2022.
In February 2024, Kioxia and WD announced that their joint venture manufacturing plants in Yokkaichi and Kitakami had been approved for a subsidy of up to JPY150 billion. This funding supports the production of their latest 3D flash memory using advanced wafer bonding technology and future semiconductor nodes.
Article edited by Jack Wu
