diff --git a/internal/netbox/hwid.go b/internal/netbox/hwid.go
new file mode 100644
index 0000000..ccd5ad2
--- /dev/null
+++ b/internal/netbox/hwid.go
@@ -0,0 +1,99 @@
+package netbox
+
+import (
+	"context"
+	"errors"
+	"fmt"
+	"regexp"
+	"strconv"
+	"strings"
+)
+
+var hwIDPattern = regexp.MustCompile(`^HW-(\d{5})$`)
+
+// formatHWID formats an integer as a HW-XXXXX string.
+func formatHWID(n int) string {
+	return fmt.Sprintf("HW-%05d", n)
+}
+
+// parseHWID parses a HW-XXXXX string to an integer.
+// Returns error if the format does not match.
+func parseHWID(s string) (int, error) {
+	m := hwIDPattern.FindStringSubmatch(s)
+	if m == nil {
+		return 0, fmt.Errorf("invalid HW-ID format: %q (expected HW-NNNNN)", s)
+	}
+	n, err := strconv.Atoi(m[1])
+	if err != nil {
+		return 0, err
+	}
+	return n, nil
+}
+
+// AllocateNextHWID allocates the next available HW-XXXXX identifier.
+// Strategy: optimistic locking — query the highest existing asset_tag, increment by 1,
+// attempt to reserve it. Retry up to 3 times on conflict.
+//
+// For Phase 1, AllocateNextHWID returns the ID string without creating a device.
+// The caller is responsible for creating the device record and setting asset_tag.
+func (c *Client) AllocateNextHWID(ctx context.Context) (string, error) {
+	const maxAttempts = 3
+
+	for attempt := 0; attempt < maxAttempts; attempt++ {
+		highest, err := c.getHighestHWIDNumber(ctx)
+		if err != nil {
+			return "", fmt.Errorf("get highest HW-ID: %w", err)
+		}
+		candidate := formatHWID(highest + 1)
+		// Check that this candidate is not already taken
+		// (handles concurrent allocation if ever needed)
+		taken, err := c.hwIDExists(ctx, candidate)
+		if err != nil {
+			return "", fmt.Errorf("check HW-ID %s: %w", candidate, err)
+		}
+		if !taken {
+			return candidate, nil
+		}
+		// Candidate is taken — loop and try highest+2, etc.
+	}
+	return "", errors.New("HW-ID allocation failed after 3 attempts — concurrent allocation conflict")
+}
+
+// getHighestHWIDNumber queries NetBox for the highest existing HW-XXXXX asset_tag number.
+// Returns 0 if no HW-XXXXX asset_tags exist (first allocation will be HW-00001).
+func (c *Client) getHighestHWIDNumber(ctx context.Context) (int, error) {
+	res, _, err := c.api.DcimAPI.DcimDevicesList(ctx).
+		Limit(1000).
+		Execute()
+	if err != nil {
+		return 0, fmt.Errorf("list devices for HW-ID query: %w", err)
+	}
+
+	highest := 0
+	for _, d := range res.Results {
+		tag := d.GetAssetTag()
+		if !strings.HasPrefix(tag, "HW-") {
+			continue
+		}
+		n, err := parseHWID(tag)
+		if err != nil {
+			continue // non-HWLab asset tag — skip
+		}
+		if n > highest {
+			highest = n
+		}
+	}
+	return highest, nil
+}
+
+// hwIDExists checks if a given HW-XXXXX asset_tag is already used in NetBox.
+func (c *Client) hwIDExists(ctx context.Context, hwid string) (bool, error) {
+	res, _, err := c.api.DcimAPI.DcimDevicesList(ctx).
+		AssetTag([]string{hwid}).
+		Limit(1).
+		Execute()
+	if err != nil {
+		return false, err
+	}
+	return res.GetCount() > 0, nil
+}
diff --git a/internal/netbox/hwid_test.go b/internal/netbox/hwid_test.go
new file mode 100644
index 0000000..d977012
--- /dev/null
+++ b/internal/netbox/hwid_test.go
@@ -0,0 +1,48 @@
+package netbox
+
+import "testing"
+
+func TestFormatHWID(t *testing.T) {
+	tests := []struct {
+		n    int
+		want string
+	}{
+		{1, "HW-00001"},
+		{42, "HW-00042"},
+		{99999, "HW-99999"},
+	}
+	for _, tt := range tests {
+		got := formatHWID(tt.n)
+		if got != tt.want {
+			t.Errorf("formatHWID(%d) = %q, want %q", tt.n, got, tt.want)
+		}
+	}
+}
+
+func TestParseHWID(t *testing.T) {
+	tests := []struct {
+		s       string
+		want    int
+		wantErr bool
+	}{
+		{"HW-00001", 1, false},
+		{"HW-00042", 42, false},
+		{"HW-99999", 99999, false},
+		{"", 0, true},
+		{"not-a-hw-id", 0, true},
+		{"HW-0001", 0, true},   // only 4 digits — invalid
+		{"hw-00001", 0, true},  // lowercase — invalid
+	}
+	for _, tt := range tests {
+		got, err := parseHWID(tt.s)
+		if tt.wantErr && err == nil {
+			t.Errorf("parseHWID(%q): expected error, got nil", tt.s)
+		}
+		if !tt.wantErr && err != nil {
+			t.Errorf("parseHWID(%q): unexpected error: %v", tt.s, err)
+		}
+		if !tt.wantErr && got != tt.want {
+			t.Errorf("parseHWID(%q) = %d, want %d", tt.s, got, tt.want)
+		}
+	}
+}