Rare earths to push HDD cost by 5-10 percent

The China government's export control policy for rare earth elements, a key material for hard drive's, will increase ASPs in the retail channel by 5-10% as hard drive makers are facing pressure from increasing costs, according to sources from hard drive makers. In the third quarter of 2011, 500GB hard drive prices will rise by 10%, while 1TB hard drives will rise about 5%.

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Although rare earth material only account for a very limited proportion in hard drive production costs, due to prices increasing by 20-30 fold, the situation is already serious enough to affect hard drive pricing.