Fujifilm Is Making Five Times More Magnetic Tape. AI Data Is Running Into a Hard Drive Squeeze.
Tape, a 70-year-old technology, is growing again. Fujifilm plans to raise tape output about fivefold by fiscal 2028, and tape shipments jumped 57% in early 2026. The reason shows up in hard drive data: Seagate's revenue grew three times faster than the storage it shipped.
Revenue per terabyte is our calculation: total revenue divided by total exabytes shipped. Sources: Seagate results, 27 October 2026; Seagate earnings call (exabytes shipped).
On 29 October 2026, Fujifilm announced its largest-ever investment in magnetic tape: about ¥10 billion to raise its production capacity for data storage tape about fivefold by fiscal 2028, compared with fiscal 2025 (Fujifilm, 29 October 2026).
Tape sounds like a relic. But it is still how much of the world’s archived data is stored, and demand is rising fast. The reason is visible in the hard drive market, where prices per terabyte are rising, not falling, and most supply is already committed for years ahead.
What Fujifilm announced
| Details | |
|---|---|
| Investment | About ¥10 billion, the company’s largest in dedicated tape facilities |
| Where | Kanagawa Factory, Odawara Site, Japan |
| When | Fiscal 2026 to fiscal 2028 |
| Target | About 5× tape production capacity, measured by shipments, vs fiscal 2025 |
| Main product | LTO Ultrium 10 cartridges |
| Reasons given | Generative AI and cloud data growth, low-cost long-term storage, protection from ransomware |
Source: Fujifilm, 29 October 2026.
Fujifilm says it holds the largest share of the world’s magnetic tape market. Only two companies make LTO tape media today, Fujifilm and Sony (Blocks & Files, 28 October 2026), so a fivefold expansion by one of them is a large change in total supply.
Tape demand is back at record levels
LTO (Linear Tape-Open) is the standard format for data tape. The three companies behind it, HPE, IBM and Quantum, publish how much tape capacity is shipped each year:
Figures are for compressed capacity, as the LTO Program reports them. One exabyte is one million terabytes. Source: LTO Program annual reports, via StorageReview, StorageNewsletter and Techzine.
Two things happened recently. In 2025, shipments fell 9%, though they were still higher than any year before 2024. The market recovered in the second half of 2025 as the new LTO-10 generation arrived, and in the first quarter of 2026 shipped capacity was 57% higher than a year earlier (StorageReview, 2 September 2026).
Part of that jump is a volume effect from bigger cartridges, not just more cartridges. An LTO-10 cartridge holds 40 TB of data uncompressed, or about 100 TB compressed. When each cartridge holds more, the same number of cartridges ships more exabytes. That is worth keeping in mind before reading the 57% as a 57% rise in buyers.
Why now: hard drives cost more per terabyte
Most data centers store their bulk data on high-capacity hard drives. For decades, the cost of storing a terabyte on disk fell almost every year. In 2026 that has reversed.
Seagate, one of the two largest hard drive makers, reported its quarter to September 2026 on 27 October (Seagate, 27 October 2026):
| Seagate, quarter to September | 2025 | 2026 | Change |
|---|---|---|---|
| Revenue | $2,629M | $4,233M | +61% |
| Storage shipped | ~182 EB | 220 EB | +21% |
| Revenue per terabyte shipped | ~$14.4 | ~$19.2 | +33% |
| Gross margin (GAAP) | 39.4% | 57.3% | +17.9 points |
Sources: Seagate results and earnings call, 27 October 2026. Year-earlier exabytes are calculated from the reported 21% growth. Revenue per terabyte is our calculation.
This is the same pattern NodeZero has tracked in memory chips: revenue is growing much faster than volume, which means the price per unit is rising. Seagate shipped 21% more storage but earned 61% more for it.
Seagate’s management describes the same thing in words:
- Pricing “continues to improve,” and management said it sees no sign of demand falling.
- The “vast majority” of its data center drive supply is committed under long-term agreements through calendar 2028, with some cloud agreements running to 2030.
- New drive orders are being priced and configured about 12 months ahead.
The squeeze started in 2025. TrendForce reported in September 2025 that lead times for high-capacity data center drives had stretched from a few weeks to more than 52 weeks, as AI services pushed up demand for storage while drive makers had not added much factory capacity (TrendForce, September 2025).
Where tape fits
Tape is slow to access. To read a file, a robot has to find the cartridge, load it and wind to the right spot, which can take a minute or more. That makes tape a poor fit for data used every day.
But much of the data that AI produces and depends on is rarely read: old training data sets, model checkpoints, logs, backups and records that must be kept. For that cold data, tape has three advantages:
Compressed capacity assumes data shrinks 2.5 times, the LTO standard's assumption. LTO-11 figures are planned, not yet shipping. Source: Blocks & Files, 28 October 2026; Fujifilm.
- Cost per terabyte. Tape is widely described as the lowest-cost medium per terabyte for data that is rarely accessed (Blocks & Files). As disk prices per terabyte rise, that gap matters more.
- Power. A cartridge on a shelf uses no electricity, while a hard drive spins all the time. In data centers where power is often the limiting resource, that frees energy for AI servers.
- Protection from ransomware. A cartridge that is not loaded in a drive is physically disconnected from any network, so an attacker cannot encrypt or delete it remotely. Fujifilm names this as one of its reasons for the investment.
What to watch
- Whether the 57% holds. The LTO Program’s full-year 2026 figures, usually published mid-year, will show whether early 2026 was a one-off LTO-10 upgrade wave or a lasting shift. Techzine reports that a record year is expected (Techzine, 29 October 2026).
- Hard drive prices in 2027. Seagate guided to about $4.8 billion in revenue for the December quarter. If disk revenue keeps growing faster than exabytes shipped, the incentive to move cold data to tape grows with it.
- Migration costs. LTO-10 drives can only read LTO-10 cartridges, unlike earlier generations that could also read older tapes. Organizations with large archives on older tapes need to plan for that.
- Whether Sony follows. Sony is the only other LTO tape maker. Blocks & Files suggests it may also raise output.
Key terms
- Magnetic tape: a storage medium that records data on a long strip of magnetic film, wound inside a cartridge.
- LTO (Linear Tape-Open): the standard format for data storage tape, now in its 10th generation.
- Exabyte (EB): one million terabytes, or one billion gigabytes.
- Compressed capacity: how much data fits on a tape if it is compressed first. LTO assumes data shrinks by 2.5 times; real results vary.
- Cold data: data that must be kept but is rarely read.
- Nearline hard drive: a high-capacity hard drive designed for data centers, used for most bulk cloud storage.
Notes on the data
- LTO shipment figures are for compressed capacity, as published by the LTO Program. Numbers for 2019 to 2025 come from the Program’s annual reports as reported by StorageReview, StorageNewsletter and Techzine. The 2019 and 2020 figures were reported as 114,079 PB and 105,198 PB.
- Fujifilm’s “fivefold” target is about production capacity, measured by shipments, not about demand or sales.
- Seagate revenue per terabyte is a rough measure: total revenue (which includes some non-hard drive products) divided by total exabytes shipped. It is our calculation, not a figure Seagate reports. The year-earlier exabytes (about 182 EB) are calculated from Seagate’s reported 21% growth.
- LTO-11 capacities are planned figures; its launch date has not been announced.
Sources
Companies: Fujifilm – Five times tape production capacity (29 Oct 2026) · Seagate – Fiscal Q1 2027 results (27 Oct 2026) · Seagate earnings call transcript (27 Oct 2026)
Industry data: StorageReview – LTO shipments up 57% in Q1 2026 · StorageNewsletter – LTO shipments 2020 · TrendForce – Nearline HDD shortage, via I-Connect007 (Sep 2025)
Reporting: Blocks & Files – Fujifilm quintupling production (28 Oct 2026) · Techzine – Fujifilm fivefold tape capacity (29 Oct 2026)
Every figure in this article links to its source and was checked against that source before publishing. How we check figures