Taiwan’s Chip Sector Unaffected by China’s Rare Earths Curbs

Taiwan's economy ministry has stated that China's new rules on rare earth exports will not significantly impact Taiwan's semiconductor industry. This is because the rare-earth elements covered by the expanded ban differ from those required in Taiwan's chip manufacturing processes.

China expanded its rare earth export controls on Thursday, adding five new elements and implementing additional scrutiny for chip users. This move comes as Beijing tightens its grip on the sector ahead of discussions between Presidents Donald Trump and Xi Jinping.

According to Taiwan's economy ministry, the rare-earth elements included in China's new rules are not needed for Taiwan's semiconductor manufacturing, thus no significant impact is anticipated. Products or derivatives containing rare earths required domestically are mainly sourced from Europe, the United States, and Japan.

Taiwan is home to TSMC, the world's largest contract chipmaker, which produces the majority of advanced chips essential for artificial intelligence applications. However, the ministry noted that China's latest expansion of controls could affect global supply chains for products like electric vehicles and drones, necessitating close monitoring.

Earlier on Sunday, China defended its restrictions on rare earth exports, citing concerns over the military applications of these metals amid "frequent military conflict."