Chinese Rare Earth Restrictions To Raise Hard Drive Prices

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News Posted: Fri, Aug 19 2011 3:07 PM
Multiple manufacturers in the IT industry have been keeping a wary eye on China's decision to cut back on rare earth exports and the impact it may have on component prices. An article from DigiTimes suggests consumers will see that decision hit the hard drive industry this year, with HDD prices trending upwards an estimated 5-10 percent depending on capacity.

Although rare earth magnets are only a small part of a hard drive's total cost, China cut exports last year by 40 percent, which drove pricing for these particular components up an estimated 20-30x. At that point, a rare earth component that originally cost 25 cents is suddenly $5—and given how cheap hard drives have become, that translates into a 5-10 percent increase to the retail cost. With the HDD market divided between Western Digital, Seagate, and Toshiba, there's no room in rock-bottom margins to absorb the cost jump, so the major manufacturers will have no choice but to pass it on.

The good news is, it's doubtful that anyone will notice. 1.5TB HDDs are down to $59 on NewEgg.com for those willing to accept a 5900 RPM spindle speed, and some 7200 RPM 1TB drives are $59 as well. WD is currently selling a Caviar Green 2TB drive for $69, which works out to 3.4 cents/GB. Since HDD rare earth costs don't scale linearly as drive capacities increase, this is an impact that will mostly be felt at smaller capacities.


The elements don't look like much, but modern technology relies on them. Image courtesy of
Wikipedia

China's export restrictions have caused some short-term supply issues, as the country currently controls 97 percent of the rare earth market. Despite their classification, however, the elements in question (including such popular metals as neodymium, cerium, yttrium and ytterbium) aren't actually all that uncommon. They are called rare earth elements because they tend to be geographically dispersed in an area, as opposed to clumping together into handy veins of ore.

The Chinese restrictions have spurred a worldwide search for additional deposits. Molycorp intends to re-open the Mountain Pass rare earth mine in California and the exploration firm Quantum Rare Earths Development Corp announced two weeks ago that it has located what may be one of the world's largest deposits of rare earth minerals underneath a small Nebraskan town.
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Inspector replied on Fri, Aug 19 2011 5:00 PM

If ur in need of HDDs, STOCK UP NOW! :D lol

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If anything HDD's need to drop more in price.

SSD'S are the future.

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rrplay replied on Fri, Aug 19 2011 9:16 PM

Sure seems like the price per GB has never been better with HD s and the ram prices have been really good also.Some of the simple upgrades or back up HD can be very effective with pricing like these.

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realneil replied on Sat, Aug 20 2011 12:18 PM

ThunderBird:
If anything HDD's need to drop more in price.

I know that prices have been dropping on platter drives for a long time. I like that, because they're plenty fast enough to stream data for any of my needs.

They'll probably continue to drop for a while, but sometime, they're gonna reach a point where it doesn't pay to make them for less money anymore.

Platter drives are well within my budget as of now, but SSD's, (the wave of the future) need to come down a lot as I see it.

 

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This attempt at China to control the market in the same manner that Saudi Arabia controls the Oil market is a bunch a BS... can't we all just share.

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