Seagate Maintains Price Hikes, Forecasts 25% CAGR in Nearline Exabyte Growth
Romano said Seagate will maintain modest price hikes to promote higher-capacity drives, holding average $/TB flat to slightly up for 2026 while selling 100% of produced exabytes. It sees about 25% CAGR in nearline exabytes over three years via full factories, rising SMR share and 20% HAMR Mozaic 3+ shipments.
1. Pricing Strategy and Demand
CFO Gianluca Romano emphasized a consistent pricing approach with small increases at contract renewals, aimed at steering customers to higher-capacity drives. He affirmed that Seagate sells all produced nearline exabytes and expects average price per terabyte to remain flat to slightly up through calendar 2026.
2. Exabyte Growth and Capacity
Seagate’s factories are running at full capacity, and the company plans to grow exabytes at about a 25% compound annual rate over the next three to four years. Growth will come from higher-capacity SMR drives rather than unit volume expansion.
3. HAMR Technology Ramp
More than 20% of nearline exabytes shipped last quarter used the HAMR Mozaic 3+ platform. Seagate is qualifying Mozaic 4+ with major cloud customers and anticipates meaningful cost-per-terabyte reductions starting with its 40TB generation later this year.
4. Financial Goals and Capital Returns
The company has reduced debt from over $6 billion to under $4 billion and targets returning more than 75% of free cash flow to shareholders. Ongoing margin improvements are supported by product mix shifts, yield enhancements and steady pricing discipline.