At-Scale, Hard Disk Drive Rare Earth Material Capture Program Successfully Launched in the United States

Rhea-AI Summary

Western Digital (WDC) has successfully launched a groundbreaking rare earth element (REE) recovery program in collaboration with Microsoft, Critical Materials Recycling, and PedalPoint Recycling. The pilot program transformed ~50,000 pounds of end-of-life hard disk drives (HDDs) and related materials into valuable resources using eco-friendly processes.

The initiative achieved an impressive ~90% high-yield recovery of elemental and rare earth materials, including Neodymium, Praseodymium, and Dysprosium, while recapturing ~80% of feedstock mass. The program utilizes acid-free dissolution recycling technology, resulting in an estimated 95% reduction in greenhouse gas emissions compared to traditional mining.

This domestic recycling effort addresses critical supply chain challenges, considering that currently >85% of REE production occurs outside the U.S., with domestic recycling rates at <10%. The program demonstrates a sustainable approach to recovering valuable materials while strengthening the U.S. supply chain and supporting industries like electric vehicles, wind turbines, and advanced electronics.

Positive

• 90% high-yield recovery rate of rare earth elements
• 80% recapture of total feedstock mass
• 95% reduction in greenhouse gas emissions compared to traditional mining
• Successful processing of 50,000 pounds of materials
• Development of economically viable recycling system
• Strengthening domestic supply chain independence

Negative

• Current U.S. domestic recycling rate remains very low (<10%)
• Heavy dependence on foreign REE production (>85% outside U.S.)

Insights

Supply Chain & Materials Analyst

WDC's rare earth recycling program with Microsoft enhances supply security, reduces costs, and positions company ahead of competitors in critical materials management.

Western Digital's launch of a rare earth element (REE) recycling program represents a significant strategic initiative addressing a critical vulnerability in the HDD supply chain. With >85% of global REE production occurring outside the U.S. and domestic recycling rates at <10%, this initiative directly tackles a material business risk for Western Digital.

The impressive ~90% recovery yield of elements like Neodymium, Praseodymium and Dysprosium achieved in this pilot program is particularly noteworthy - these specific elements are crucial magnetic components that enable the precision of HDD read/write functions. Traditional recycling methods typically miss these elements entirely, resulting in both value leakage and continued supply vulnerability.

By establishing a domestic, closed-loop supply chain for these critical materials, Western Digital accomplishes three strategic objectives simultaneously: 1) reducing exposure to geopolitical supply disruptions, 2) potentially lowering input costs as recycling technologies scale, and 3) preparing for inevitable regulatory changes favoring circular material flows.

Microsoft's participation as both partner and material source (from their data centers) creates a potential virtuous cycle - as cloud infrastructure grows, more end-of-life HDDs become available for recycling, further strengthening the domestic supply pool. This addresses a fundamental weakness in the U.S. technology manufacturing base.

While immediate financial impacts remain unquantified, the long-term strategic positioning cannot be overstated. As HDDs continue to face competition from SSDs in some segments, innovations that strengthen the cost structure and sustainability profile of HDDs strengthen Western Digital's competitive position in high-capacity storage markets essential to AI and cloud computing growth.

ESG Investment Specialist

WDC's REE recycling program significantly enhances its ESG profile, mitigates regulatory risks, and creates competitive advantages with sustainability-focused customers and investors.

Western Digital's rare earth element recovery initiative represents a material ESG breakthrough that transforms a significant environmental liability into a strategic asset. The acid-free dissolution recycling technology employed delivers an estimated 95% reduction in greenhouse gas emissions compared to traditional mining operations - a quantifiable environmental benefit that strengthens WDC's climate impact narrative.

Beyond emissions, this program directly addresses two critical ESG concerns: waste reduction and responsible resource management. By recapturing ~80% by mass of the feedstock and achieving ~90% recovery of valuable materials, Western Digital demonstrates measurable circular economy implementation - not just aspirational goals common among competitors.

The partnership structure with Microsoft adds particular value from an ESG investment perspective. It demonstrates downstream customer engagement with Western Digital's sustainability initiatives, suggesting potential preference for environmentally responsible suppliers. This commercial validation is precisely what sophisticated ESG investors seek - sustainability initiatives that create tangible business advantages.

From a regulatory standpoint, this program positions Western Digital favorably ahead of potential extended producer responsibility requirements and critical mineral regulations being considered in multiple jurisdictions. As governments increasingly view rare earth element supply as a national security concern, companies demonstrating leadership in domestic recycling may gain preferential treatment.

For ESG-focused investors, this initiative checks multiple boxes: supply chain resilience, waste reduction, emissions reduction, and strategic alignment with circular economy principles. This comprehensive approach to material sustainability challenges should enhance Western Digital's ESG ratings and appeal to environmentally conscious institutional investors.

Western Digital, Microsoft and others collaborate in rare earth element recovery and circular recycling program using environmentally friendly chemistry to help build up critical rare earth element reserves and enhance supply chains

SAN JOSE, Calif.--(BUSINESS WIRE)-- Essential to cloud data center infrastructure, hard disk drives (HDDs) are complex devices that blend material science, mechanical engineering and physics. As part of its innovation, HDDs use a range of rare earth elements (REEs) like Neodymium (Nd), Praseodymium (Pr) and Dysprosium (Dy), prized for their magnetic properties to help HDDs precisely read and write data. Yet, traditional recycling methods recover only a fraction of these valuable materials, often missing rare earths entirely, leading to unnecessary waste.

In a multi-party pilot program, Western Digital (Nasdaq: WDC), in collaboration with Microsoft, Critical Materials Recycling (CMR) and PedalPoint Recycling, has taken a major step toward closing that loop. Together, the companies transformed ~50,000 pounds of shredded end-of-life HDDs, mounting caddies and other materials into critical high-value materials, all while significantly reducing environmental impact. This pioneering process of creating a new advanced sorting ecosystem with an eco-friendly non-acid process not only recaptures essential rare earth elements but also extracts metals like gold (Au), copper (Cu), aluminum (Al) and steel, feeding them back into the U.S. supply chain, supporting industries that rely on these resources—such as electric vehicles, wind turbines, and advanced electronics. When scaled worldwide, this new recycling process could return a lot of recovered rare earths to the U.S. supply pool, drastically reducing the need for virgin material mining detrimental to people and planet.¹ Today, most primary production (>85%) of REEs occurs outside of the U.S.^2,3 and the current domestic recycling rate for REEs is very low (<10%)⁴.

The materials for the project were collected from several Microsoft data centers located in the United States. This multi-party pilot showcases a highly efficient, economically viable system that achieved an impressive ~90% high-yield recovery of elemental and rare earth materials that can be used by the U.S. supply chain. Advanced chemical processes, combined with meticulous segregation of components, also allowed the system to recapture ~80% by mass of the feedstock turning potential waste into valuable assets.

The innovation doesn’t stop there. Based on Life Cycle Analysis methodology, there is an estimated 95% reduction in greenhouse gas emissions compared to traditional mining and processing practices. By performing the entire Rare Earth Oxide (REO) production process domestically, the program minimizes transportation emissions and boosts the resilience of the U.S. supply chain, decreasing dependency on imported materials.

The ripple effects can be significant. By enabling industries to access high-purity, more sustainably sourced materials, this program can reduce the environmental footprint not only of data centers but also of the industries that depend on rare earth elements.

“This initiative sets a new standard for end-of-life data storage management,” said Jackie Jung, vice president of Global Operations Strategy and Corporate Sustainability at Western Digital. “In today’s rapidly evolving data landscape, innovation must extend beyond a device’s lifecycle. Western Digital and its partners are leading the way, transforming retired storage devices into critical resources that power our future—while protecting the planet and strengthening the economy and U.S. supply chain. This project isn’t just a milestone; it’s a blueprint for large-scale, domestic recycling of essential metals and materials that will drive sustainable progress for years to come.”

"This is a tremendous effort by all parties involved. This pilot program has shown that a sustainable and economically viable end-of-life (EOL) management for HDDs is achievable," said Chuck Graham, corporate vice president, Cloud Sourcing, Supply Chain, Sustainability, and Security at Microsoft. "HDDs are vital to our data center infrastructure, and advancing a circular supply chain is a core focus for Microsoft. We're proud to be a part of this initiative with our partners, creating opportunities to reuse and recycle materials, reduce waste, and lower carbon impacts across the industry."

The environmentally friendly, acid-free dissolution recycling (ADR) technology used in this project was invented and initially developed at the Critical Materials Innovation (CMI) Hub. “Scaling the ADR technology from lab to demonstration scale in just eight years is a testament to the incredible work by the team at CMR. This project is significant because HDD feedstock will continue to grow globally as AI continues to drive the demand for HDD data storage. CMI is proud to have supported the initial development, along with the Ames National Laboratory, to support this program’s growth and reach as a viable green approach to recover rare earth elements using environmentally friendly chemistry,” said Tom Lograsso, director of CMI.

“At PedalPoint Recycling, our mission is to secure and properly recover strategic metals from recycling. This is an exciting project that clearly demonstrates the positive impact companies can have on recycling when they partner and collaborate,” said Brian Diesselhorst, CEO, PedalPoint Recycling.

Read more at:
Blog: Giving HDD Rare Earth Elements New Life
Whitepaper: Advanced Recycling and Rare Earth Recovery at Scale

About Western Digital

Western Digital empowers the systems and people who rely on data. Consistently delivering massive capacity, high quality and low TCO, Western Digital is trusted by hyperscale cloud providers, enterprise data centers, content professionals and consumers around the world. Core to its values, the company recognizes the urgency to combat climate change and is on a mission to design storage technologies that not only meet today’s data demands but also contribute to a more climate-conscious future. Follow Western Digital on LinkedIn and learn more at www.westerndigital.com.

© 2025 Western Digital Corporation or its affiliates. All rights reserved. Western Digital, the Western Digital design, and the Western Digital logo are registered trademarks or trademarks of Western Digital Corporation or its affiliates in the US and/or other countries. All other marks are the property of their respective owners.

¹ E. Sanchez Moran, D. Prodius, I.C. Nlebedim, and M. Mba Wright, “Rare-Earth Elements Recovery from Electronic Waste: Techno-Economic and Life Cycle Analysis,” ACS Sustain Chem Eng, Sep. 2024.
² “Rare earths: production share by country 2023 | Statista.” Accessed: Mar. 16, 2024: https://www.statista.com/statistics/270277/mining-of-rare-earths-by-country/
³ USGS (Daniel J. Cordie), “Mineral Commodity Summaries – Rare Earths,” Jan. 2022.
⁴ E. Wayman, “Recycling rare-earth elements is hard — but worth it,” ScienceNews Explores, May 04, 2023.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250417266821/en/

Press Contact:

Western Digital: WD.Mediainquiries@wdc.com

Source: Western Digital

FAQ

What recovery rate did Western Digital's (WDC) rare earth recycling program achieve?

The program achieved approximately 90% high-yield recovery of elemental and rare earth materials, while recapturing about 80% of the total feedstock mass.

How much does WDC's new recycling process reduce greenhouse gas emissions?

The program achieves an estimated 95% reduction in greenhouse gas emissions compared to traditional mining and processing practices.

What materials are being recovered from WDC's HDD recycling program?

The program recovers rare earth elements like Neodymium, Praseodymium, and Dysprosium, as well as metals including gold, copper, aluminum, and steel.

How many pounds of HDDs were processed in WDC's pilot program?

The pilot program processed approximately 50,000 pounds of shredded end-of-life HDDs, mounting caddies, and other materials.

What is the current domestic recycling rate for rare earth elements in the US?

The current domestic recycling rate for rare earth elements in the United States is less than 10%.