Twelve months ago, if you had asked anyone in the industry what the biggest limiting factor for future AI data center growth was, they would probably have said a lack of available GPUs. Reports of Nvidia NVL72 Blackwell racks overheating had started to swirl, and customer anxiety over shipping delays was reaching fever pitch.

Fast forward to 2026, and the picture is rather different. Against all odds, the chip supply chain has remained impressively resilient, but concerns have instead turned to shortages of other components, namely enterprise-grade Hard Disk Drives (HDDs), which are currently facing lead times of up to two years as manufacturers struggle to keep up with AI demand.

HDDs, which use magnetic storage to retain information, have long been popular with data center operators due to their ability to provide high capacity at scale while offering a lower cost per terabyte compared to Solid State Drives (SDDs), where data is kept in integrated circuits. However, as Matt Taylor, VP and GM of artificial intelligence (AI) at storage firm Everpure (the new name of the company formerly known as Pure Storage), explains, HDDs are now effectively sold out through 2027, and the hard drive manufacturers aren't building any more capacity. And even if they could - and right now they're not - it takes a couple of years of investment to get more capacity online.

Taylor says the scale of many of the AI data centers announced this year has taken the industry somewhat by surprise, and while companies have been smart enough to shore up their supply of GPUs to support these deployments, for others, “storage has kind of been an afterthought in the hierarchy of what they're prioritizing.”

“The world has been so focused on GPUs. But people are starting to realize that in order to go and deploy these large-scale, complex data centers, they need more than just GPUs,” he laughs.

“Now, that next order of the critical supply chain has become memory, storage, and data center infrastructure, and I just don't think people thought about it.”

In addition to the unprecedented number of planned data center deployments, Taylor says that long-term supply agreements signed before the AI data center build-out boom are also likely to have exacerbated the problem, with vendors across the storage industry now having to work with customers to plan out their needs over the next two years.

Customers have been somewhat blindsided by the shortage – as recently as two quarters ago, there was still plenty of supply, he says, describing the current situation as “scramble mode.”

In a separate conversation, hard drive-maker Seagate’s Mohamad El-Batal, chief technologist in the company’s CTO Office, described the current situation as a “supply chain nightmare,” noting that many component supplies are currently on a 52-week allocation.

Taylor says that in recent months, Pure Storage has had a lot customers ask the company to educate their supply chain teams on what's happening in the market, leading to a number of frank discussions about what Pure is seeing from a vendor perspective, and looking at what are the trade offs in terms of different timelines or how the company can best map to their requirements.

However, he cautions that there are not a lot of easy solutions, and even careful planning doesn’t mean the problems facing the industry will suddenly disappear.

“The reality is we're going to be in this state for a while,” he says. “On the hard drive side of things, people need to realize that all the hard drive capacity is bought. People have been saying: ‘Maybe the hyperscalers won’t order too much’ or ‘They're just trying to capture all the supply that's out there to be strategic,’ as has happened when there’s been shortages before.

“But that’s not the situation here. [The hyperscalers] have all bought everything they can, and they still want more, but there is no more, and I don’t think we’re going to see an easing of the market any time next year.”

The rise of the all-flash data center

One way data center operators are looking to mitigate this problem is by transitioning to flash storage, specifically QLC (quad-level cell) storage.

This is a capacity-optimized NAND memory technology that can lower the total cost of ownership for read-centric loads, providing increased capacity with the speed of all-flash. However, QLC storage is also less durable than other quad-level solutions, such as TLC (triple-level storage) or SLC (single-level cell), offering 1,000 program-erase cycles before it starts to break down and become unreadable. By comparison, SLC SSDs can withstand more than 100,000 read cycles, on average.

Taylor says QLC technology is being touted as a hard drive replacement because, from a cost-per-terabyte perspective, it is the next best alternative. Earlier this year, Pure Storage announced it was partnering with Korean memory manufacturer SK Hynix to deliver QLC flash storage products to hyperscale data centers.

With QLC, “the density of the technology is going up significantly in terms of bits per cell, whereas TLC is not as much,” Taylor explains. “So that's the appeal – with QLC I can get to cost economics on a dollar per bit, or dollar per terabyte, that is hard to reach on TLC.”

While TLC does continue to be deployed in many leading-edge environments, Taylor says that if managed correctly, QLC can also meet a lot of the needs of high-performance workloads. Furthermore, he says that in the long term, the total cost of ownership of a QLC-based environment – not simply acquisition of the technology, but also taking power costs, reliability, and uptime into account – is proving to be lower.

Some hyperscalers, such as Meta, have already been vocal about their desire to transition away from combination HDD and SSD deployments in favor of all-flash data centers, with the company releasing a blog post in March of this year titled ‘A case for QLC SSDs in the data center.’

In it, Meta said that while HDDs have been growing in density, they’ve failed to match that with performance. It went on to argue that the growing need for increased power efficiency has led to the development of innovative storage solutions, with QLC storage “forming a middle tier between HDDs and TLC SSDs - providing higher density, improved power efficiency, and better cost than existing TLC SSDs.”

Although the shortage of HDDs is helping to accelerate the transition to all-flash data centers, Taylor says it’s not something that can happen overnight, with customers still needing to source HDDs in the interim. Furthermore, it's been reported that companies rushing to shore up supplies of QLC storage to avoid similar shortages has led to production capacity being booked through to 2026 at some NAND manufacturers.

Taylor says he expects to see more NAND availability in the second half of next year, but notes that, like with HDDs, there's way more demand than there is supply right now.

“HDD unavailability has accelerated that move [to all-flash] substantially, and the hyperscalers are buying it in tens or hundreds of exabytes a year – that shift from them is a major industry movement,” he says, noting that simultaneously, all of the large AI labs are accelerating their deployments of these large-scale AI infrastructures, which are also predominantly all-flash.

For high-performance workloads, three tiers of storage are typically deployed: a caching layer that is all NVMe-based flash, a warm tier, which is SSD-based, and a cold, or archived tier, which has traditionally consisted of HDDs or tape, though flash-based options for cold storage are now becoming a reality too.

“So, you've got the hyperscalers making this move, you've got the AI foundation model builders also doing this, and then you've got just a general build-out happening in the neocloud space, and they're pretty much all deploying SSDs as well,” Taylor says. “All three of these combined have created this huge onslaught of demand that is creating a challenge.”

In the long term, Taylor says this leaves the industry with an important question to answer: Given this increasing desire to transition from HDDs to QLC, will the industry ever go back to the traditional hard drive?

“If you can't get more hard drives, so decide to make this transition, which has been slowly happening already, why would you go back?” he questions, noting that there is a lot of industry excitement about the potential opportunities this presents drive manufacturers with.

With hyperscalers buying into the narrative that all-flash is the way to go, Taylor notes that although there are historical reasons that have stopped them fully committing to the transition previously, the shortages in the HDD market is likely to act as a forcing function, fueling investment and R&D spend in NAND technology, leading to solutions that can offer higher density bits per cell and making the cost economics of QLC even better over time.

“I do think this is a trend, and it’ll be a huge opportunity for the flash industry to go and actually accelerate development,” he argues. “I also think the ability for the supply chain to flex is much easier on the flash side of things – yes, you can't easily build more fabs, but you can increase the wafer count, or increase the number of starts you have,” he says.

“It won’t happen overnight, but it’s certainly an easier task for the NAND market to achieve than it is for the hard drive industry.”