Key Points
- Taiwan says China’s new rare earth export curbs will not significantly impact its chip industry.
- The rare earths included in the ban are different from those used in semiconductor manufacturing.
- Taiwan sources its necessary rare earths from Europe, the U.S., and Japan.
- China’s move is seen as a way to gain leverage in its trade talks with the U.S.
Taiwan’s economy ministry said on Sunday that China’s new, expanded export controls on rare earth materials will not have a significant impact on the island’s crucial semiconductor industry. The ministry explained that the specific rare earth elements included in the new ban are different from the ones needed for chip manufacturing.
The statement is a direct response to China’s dramatic move on Thursday to tighten its grip on the global rare earths market. Beijing added five new elements to its export control list and increased scrutiny for any company that uses them, a move seen as a power play ahead of a key meeting between President Trump and President Xi Jinping.
Taiwan, home to the world’s most important chipmaker, TSMC, is at the center of the global tech supply chain. Any disruption to its industry would have massive ripple effects. However, the government is downplaying the immediate threat, stating that the rare earths needed for its chip production are mainly sourced from Europe, the United States, and Japan.
While the chip industry may be safe for now, the ministry did warn that the new Chinese curbs could still affect the global supply chains for other important products, such as electric vehicles and drones.
China, for its part, has defended the new restrictions, saying they are motivated by concerns over the “military applications” of these critical materials.
