NdFeB Demand Destruction: Will SSD Technology Replace HDD in Two Years?

Feb. 21, 2016

SSD prices to fall below HDD prices in 2016

According to Storage Newsletter, prices of Solid State Drives (“SSDs”) for computer data storage will fall below prices of comparable Hard Disk Drives (“HDDs”) in 2016 for consumer applications (as opposed to enterprise applications).

Unlike SSDs, in which there are no moving parts, HDDs contain NdFeB magnets in their voice-coil and spindle motors. In 2015 we estimate that 5,534 tonnes of NdFeB alloy was consumed globally to produce magnets for some 419 million HDDs – an amount that made up approximately 7% of all NdFeB demand globally. As such, HDDs are a significant, yet often overlooked, rare earth demand-driver.

Price parity to serve a death-blow to legacy HDD technology

With no moving parts, and hence no NdFeB magnets or motors, SSDs are not wear-prone like HDDs and can transmit data an order of magnitude faster. As a result, it’s widely believed that when SSD prices do fall below HDD prices, it will serve as a death-blow to the legacy technology.

However, experts from Information Week suggest that as SSD prices continue to fall, so too will HDD prices, pushing back the point at which the two technologies will reach price parity to the end of the decade.

Rare earth magnet demand for HDD to decline 15% by 2020

In either case, it’s appears clear that demand for HDDs will decline steadily from 2016 through 2020, destroying some demand for the NdFeB magnets they contain. By 2020 we conservatively forecast that demand for NdFeB for HDDs will fall to 4,681 tonnes – 15% less than in 2015.

Nevertheless, demand for NdFeB alloys for other applications, such as wind turbine generators, electric vehicle powertrain motors, industrial end-uses, and more, will continue to grow strongly, fueling healthy demand growth for NdFeB overall from 2015 through 2020.

 

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