Brandon J. Weichert
TSMC insists that Chinese rare earth mineral export bans will not affect its production of advanced semiconductors, and has taken concrete steps to minimize disruption.
China has played its most dangerous hand yet in the ongoing trade war: it has threatened the world with export bans on critical rare earth minerals, using its stranglehold over global markets to undermine would-be competitors.
Not to worry, says the Taiwan Semiconductor Manufacturing Company (TSMC), the producers of the world’s most sophisticated semiconductors. TSMC insists that it has taken precautions to insulate itself from the Chinese rare earth mineral export control and that their operations will be unaffected by Chinese threats.
Even if TSMC can insulate itself from Chinese export bans on rare earth minerals, though, the fact remains that China could invade Taiwan—and knock out TSMC production lines entirely.
China Doesn’t Control All Rare Earth Minerals Everywhere
According to the government of Taiwan, the new Chinese export controls are not expected to have a major impact on the chip sector because the rare earths that China is curbing do not have to do with the rare earth minerals needed for semiconductor production. Further, Taiwan (and TSMC) source many key materials or derivatives from outside China—including from Europe, the United States, and Japan—which means dependence on Chinese exports for those specific items is reduced.
TSMC has indicated that for certain key raw materials (such as gallium and germanium) they have a buffer or alternative supply which gives them time to adjust. Plus, many of the “rare earth minerals” that get media attention are those used in magnets (for electric vehicle motors or certain defense applications). TSMC insists these are not necessarily the rare earths critical for, say, wafer fabrications at the most advanced nodes.
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