The company will ship samples as early as June and set up mass production by July.

Toshiba Electronic Devices & Storage (TDSC) will join hands with a TDK unit and install assembly lines at the latter's base in South China's Guangdong province for an undisclosed sum. This arrangement will enable Toshiba to slash shipping among other costs associated with its existing data center customers in China while also making it easier to provide customer support.

Toshiba currently only makes data center hard drives in the Philippines and wants to set up production elsewhere for geographical diversification. Separately, the company already has a Chinese factory for hard drives used in computers and other products.

Investment in data centers is on the rise. The market for data center hard drives will grow roughly 40 percent from $13.8 billion in 2021 to $19.6 billion in 2026, Japanese research firm Techno Systems Research forecasts.

Toshiba -- one of the top three players, along with US firms Seagate and Western Digital -- aims to expand its global market share to at least 24 percent by fiscal 2025 from 17 percent in fiscal 2021.

As per Toshiba, consumer products such as personal computers and video game systems are increasingly migrating to solid-state drives, which offer faster load times. However, the firm is betting that data centers, which house massive troves of information, will continue to choose hard drives because of their significantly lower costs -- around a seventh those of SSDs.

In February, Hiroyuki Sato, president and CEO of TDSC, in Tokyo, shared that Toshiba plans to leverage its disk stacking technology to lift near-line HDD capacities to 30TB by the 2023 fiscal year.