On May 5, Nikkei Asia reported that Toshiba will soon start producing hard disk drives for data centers in China, and plans to increase global nearline storage capacity from fiscal 2020 by fiscal 2025 as storage demand increases. The annual level has nearly doubled.

The company will ship out samples as early as June, and then start mass production in July.

Toshiba Electronic Equipment and Storage will join forces with a unit of TDK to install an assembly line at the latter's base in Guangdong province, the report said, for an undisclosed amount. The arrangement will allow Toshiba to cut shipping and other costs associated with existing data center customers in China, while also making it easier to support customers.

Toshiba now only makes data center hard drives in the Philippines and hopes to build capacity elsewhere to diversify geographically. In addition, the company has a factory in China that makes hard drives for computers and other products.

Currently, investment in data centers is increasing. Japanese research firm Techno Systems Research forecasts that the market for data center hard drives will grow from $13.8 billion in 2021 to $19.6 billion in 2026, an increase of about 40%.

Toshiba aims to expand its global market share to at least 24% by fiscal 2025 from 17% in fiscal 2021.

Consumer products such as personal computers and video game systems are increasingly turning to solid-state drives due to their faster loading speeds, the report said. But Toshiba believes that data centers with vast amounts of information will continue to opt for much lower-cost hard drives. It costs about one-seventh the cost of a solid-state drive.