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Hard Drive Prices Skyrocket In Asia Due to New Chia Cryptocoin, Scalpers Capitalize

Hard Drives
Hard Drives (Image credit: Shutterstock)

A report from China last week pointed out that cryptocurrency miners were buying up hard drives and SSDs to farm Chia, a cryptocurrency that isn't scheduled to start trading until May 3. While the situation hasn't gotten to the point of a global shortage, new reports from two other Asian publications have confirmed that hard drive pricing has soared through the roof in some regions, and hard drive maker Seagate has confirmed in its quarterly financial earnings that it sees a surge in demand related to cryptocurrency mining.

Chinese news outlet Time Finance launched an investigation at an electronic mall located in Zhongguancun (dubbed as the "Chinese Silicon Valley"), Beijing, to interview some local hard drive dealers. Time Finance uncovered the dirty truth behind the price hikes: Besides the increased demand, a small circle of hoarders are astutely stockpiling hard drives to ramp up the pricing.

According to Time Finance's research, China's hard drive distribution channel starts with the manufacturer, whether it be Western Digital or Seagate. The hard drives go through an agent, then a distributor, before finally making their way to the merchant. Several sources told Time Finance that there isn't a hard drive shortage. However, one of the sources told the publication that the Seagate and Western Digital agents simply aren't shipping out orders. Another merchant claimed that Western Digital recently held a meeting where the company purportedly said it wasn't possible to ship orders to the dealers right now, and it had to recall a lot of products.

Apparently, some of the well-informed sellers knew about the price increase from a month ago. Merchants with deep pockets and direct access to the agents obviously took the opportunity to stock up when the pricing was more reasonable. Small-time scalpers bought a few units to flip as they're afraid that the price will eventually drop. On the other hand, the really serious resellers went all in and purchased thousands of hard drives to resell. One merchant allegedly made 3 million yuan (~$461,900) in a single day when the prices increased. Take the number with some salt since it's not information that we can verify. Time Finance noted that scalpers were also offering their overpriced goods in WeChat groups.

Hard Drive Pricing In China

Hard DrivePrice IncreaseCurrent PriceLowest Price (1 week ago)
Western Digital WD Gold 18TB40.4%$1,231$877
Seagate Exos X18 18TB66.7%$1,077$646
Seagate SkyHawk AI 18TB39.4%$923$662
Seagate Exos X16 16TB60.6%$816$508
Seagate IronWolf 16TB56.2%$814$521
Ultrastar DC HC550 16TB30.3%$662$508

*Data from manmanbuy.com

For casual farmers, Chia doesn't require the biggest hard drives on the market; even 4TB hard drives will suffice. For prospective investors, however, the high-capacity units are the most sought-after models, particularly enterprise-class hard drives. In fact, many Seagate and Western Digital hard drives above the 6TB capacity are all sold out at JD.com and Taobao, two of the biggest online retailers in China.

We randomly compared a few 18TB and 16TB hard drives using data from manmanbuy.com, which is a popular price tracker for JD.com and Taobao. Compared to the lowest pricing from last week, 18TB and 16TB hard drives have increased by up to 66.7% and 60.6%, respectively. Sellers are also flipping the surveillance and NAS models, such as Seagate's SkyHawk and IronWolf lineups.

When cryptocurrency farmers have snatched up every enterprise hard drive, they may resort to surveillance-grade models. Admittedly, surveillance hard drives aren't as reliable as enterprise ones, but they should still prove to be more durable than mainstream hard drives. And when those are gone, the consumer hard drives won't have anywhere to hide.

The Chia phenomenon isn't limited to the Chinese market, either. Hermitage Akihabara reported that Japan's storage market is experiencing a similar situation. Bulk purchases have increased since last week, and many stores are enforcing new purchasing restrictions to maintain a steady inventory. However, one shop told the Japanese news outlet that the stock for hard drives that are bigger than 8TB is depleted, and buyers are applying for orders of 100 units at a time.

Chia isn’t available for transactions yet, so the real value of a single Chia (XCH) coin is still uncertain. It’s a high-risk, high-reward investment for early adopters that are pouring truckloads of money into building an infrastructure for Chia.

While hard drive pricing is at a historic high in China or Japan, there's no need for panic shopping because the lack of stock is isolated to specific regions of Asia. Furthermore, freight rates have increased, and hard drives aren't the lightest computer component to ship. Even if a manufacturer has tons of stock, quickly shipping products to the other side of the globe is a challenge and certainly not cheap, limiting the impact on the overall global hard drive supply. At least for now. 

  • InvalidError
    Time to break out those "Warning: Tears Ahead!" signs. Again.
    Reply
  • USAFRet
    InvalidError said:
    Time to break out those "Warning: Tears Ahead!" signs. Again.
    I just popped for a 16TB Tosh Enterprise.

    To replace a 8TB Seagate that momentarily goes offline and causes the Volume to report a problem.
    Reply
  • TheJoker2020
    Hard Drives have been at ridiculous prices for several years now, this just makes things even worse.

    The only Hard Drives I have bought in the last 5+ years have all been WD USB-3 drives on Amazon specials when they are literally half the price of the SATA equivelent drives.!

    Does anyone know why the prices have been so high for several years.?
    Reply
  • InvalidError
    TheJoker2020 said:
    Does anyone know why the prices have been so high for several years.?
    HDDs seemed plenty cheap to me, can't get much cheaper than they already were (~$40 for 1TB) since there is a significant minimum manufacturing cost to all the parts and machining necessary to make a functional single-platter drive.
    Reply
  • TheJoker2020
    InvalidError said:
    HDDs seemed plenty cheap to me, can't get much cheaper than they already were (~$40 for 1TB) since there is a significant minimum manufacturing cost to all the parts and machining necessary to make a functional single-platter drive.
    I bought 6, 8 and 10TB HDD's several years ago, and in 2019 I looked at the prices and they were all noticibly higher than I paid in previous years for the same capacity and even models (mostly WD Red drives, plus one Iron Wolf).!
    Reply
  • peachpuff
    We need a "how to mine with your hard drive" article, let me just open my 16tb drive now and wipe my other ones of "stuff"
    Reply
  • Chung Leong
    Malware eating up all your storage space is just around the corner...
    Reply
  • Giroro
    What data is Chia actually storing on its farmer's computers, and can its users be imprisoned when it turns out to be illegal?

    Also, where are the financial transactions going to be processed?
    Reply