Long supply chain cycle triggers market concerns Seagate Technology Holdings PLC (STX.US) plunges 7% collectively weak in storage chip sector

Due to concerns about the lengthening of the supply chain cycle and market worries about industry capacity expansion, Seagate Technology Holdings PLC (STX.US) saw its stock price drop by about 7% on Monday, dragging down the overall performance of the storage and AI sectors. At the J.P. Morgan Global Technology, Media and Communications Conference, Seagate CEO Dave Mosley stated that some of the company's core products currently face a "very long" production cycle. He pointed out that the production cycle for magnetic recording heads used in hard drives at Seagate could exceed 9 months. Mosley mentioned that as hard drive technology continues to increase in complexity, the current industry supply chain cycle is much longer than it was 15 to 20 years ago. Back then, the expansion of wafer fabrication plant capacity only took a few months, but now the production cycle for key components has significantly lengthened. Meanwhile, the market is also beginning to worry that the industry may be expanding capacity on a large scale during a peak demand period, and by the time the new capacity is actually released, the demand cycle may have slowed down. In response to this, Mosley stated that the equipment currently being added by the company is more to support technological upgrades rather than simply expanding capacity. He emphasized that Seagate is currently more focused on the supply of long-cycle critical components, and the company still maintains some flexibility in hard drive backend assembly. In addition, Mosley highlighted the latest progress of the company's next-generation Heat-Assisted Magnetic Recording (HAMR) hard drive products. He revealed that Seagate has already shipped millions of HAMR hard drives and has obtained product certifications from all target cloud service providers (CSPs). Among them, the 4TB product based on the Mozaic 3 platform has even been certified by two customers. However, market sentiment remains cautious. Apart from Seagate, the stock prices of several other storage manufacturers also fell on Monday. SanDisk, Western Digital Corporation, and Micron Technology, Inc. all dropped by over 6% and 4% respectively.