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WD: HDD price rises due to rare earth shortage

by Scott Bicheno on 23 August 2011, 08:00

Tags: WD (NYSE:WDC)

Quick Link: HEXUS.net/qa6xy

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Periodic problem

According to HEXUS sources in the channel, hard drive giant Western Digital has begun notifying its partners that they can expect to see the price of its HDDs increasing, with immediate effect, as a result of the spiralling price of rare earth elements.

In its communication WD refers to a story by Digitimes last week, in which it was suggested that the price of 500GB HDDs will go up by ten percent, and 1TB drives will go up by 5 percent. From that we infer that's the level WD intends to raise prices by.

Rare earth elements is the name given to a bunch of elements in group three of the periodic table - mainly the obscure Lanthanoids, which are part of the bit at the bottom that you never bothered with at school - that are used in a few high-tech components, such as magnets, lasers and ceramics.

China currently controls nearly all of the world's supply of these rare earths, and has been restricting supply for some time, leading to an explosion in prices. While there could be geopolitical motives, China is behaving as all monopolists inevitably do, and there are currently frantic efforts in the US and Japan to find alternative sources. But for the time being we're stuck with China and the prices it sets.

It will be interesting to see how this affects the price of HDDs on the street. At time of writing we had yet to receive any formal communication on the matter from any of the hard drive-makers, but it seems unlikely this will the last price rise.

 



HEXUS Forums :: 5 Comments

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D'oh. :(

Sounds as though it shouldn't affect the overall trend too much though. 2 & 3TB drive prices will likely continue to fall faster than this price rise will affect them.
According to HEXUS sources in the channel, hard drive giant Western Digital has begun notifying its partners that they can expect to thee the price

Lisp?

Seeing as REEs are used in pretty much every gadget available these days, wouldn't this be bumping the price of all tech, not just hard drives?
Japan has recently found a new plentiful source of REEs
http://www.huffingtonpost.com/2011/07/05/rare-earth-minerals-japan_n_890121.html
As long as SSD prices are not affected , we are all good ?
That's actually a good idea on China's part, means more people will start up businesses in China and so more people there will get jobs.