Seagate $STX and Western Digital $WDC are down more than 10% today. The drop is due to news about Japan's Toshiba, which wants to invest about $380 million in expanding hard drive production and plans to double its manufacturing capacity by fiscal year 2027.

Both American companies have recently benefited greatly from growing demand for data center storage. Disks were in short supply, prices were rising, and manufacturers' margins were improving as a result. But if Toshiba starts producing significantly more, greater competition could eventually emerge in the market, which could push prices down. Moreover, both stocks have had a very strong year. Before today's drop, Seagate had risen more than 200% since the beginning of the year and Western Digital more than 140%. After such growth, investors are reacting quite sensitively.

Of course, that doesn't mean Toshiba will flood the market with new disks tomorrow. It must first expand production, and demand for data storage is still growing. I was quite surprised, though, that a single piece of news about competition was able to knock both stocks down by so many percent. Does anyone have Seagate or Western Digital in their portfolio? And do you see today's drop as an overreaction, or are you worried that greater competition will start pressuring the companies' margins?