China's reduction of rare earth exports may lead to a 5-10% increase in hard drive prices

Starting last year, the Chinese government began to adjust its rare earth export policy and adopt a quota system. As rare earth metal elements are key materials for hard disk manufacturing, according to Taiwan’s “Electronic Times” quoted insiders of hard disk manufacturers, the news is subject to a temporary reduction in the source of rare earth materials, and hard disk manufacturers are facing pressure from rising costs, which may lead to hard disk The retail channel price is raised by 5-10%.

The specific situation is approximately that in the third quarter of 2011, the price of 500GB hard disk will increase by about 10%, and the price of 1TB hard disk will increase by about 5%.

Sources also pointed out that due to the impact of the Japanese earthquake on the upstream industry chain and the continued sluggish demand for retail hard drive products in the second half of the year, hard disk shipments for the full year of 2011 may be the same as the previous year.

Although the proportion of rare earth elements in the materials needed for manufacturing hard disks is limited, due to its key position, the price increase of 20-30% can also put a great pressure on the overall price of hard disks.

In 2010, China's export volume of rare earth elements was reduced by about 40%, with a total volume of about 30,000 tons. In the future, the export quota quota for rare earth elements will be further strengthened.

Sources also stated that not only hard disk manufacturers, but also optical disk manufacturers are affected by restrictions on export of rare earths, and rising material costs may cause a group of second-tier manufacturers to withdraw from the market.

Mechanical hard disk industry After several acquisitions and mergers, there are only three major manufacturers: Western Digital, Seagate and Toshiba, the space for price cuts is already very small, so the means to pass through raw materials costs through price increases may be implemented. It is difficult to invest in rare earth minerals that are stored by other countries for the time being. As China continues to tighten its exports of rare earths, the price of mechanical hard drives may rise further in the short term.