China's Tight Rare-Earth Curbs Threaten Global Chip Supply

Beijing’s October 9 tightening of rare-earth export controls has put advanced semiconductor production and related equipment on alert.
The new rules impose case-by-case licensing on items containing at least 0.1% Chinese-origin rare earths and explicitly cover 14nm-and-below logic, 256-layer-and-up memory, related tools, and AI technologies with potential military applications. Affected materials include samarium-cobalt, neodymium-iron-boron, cerium compounds and rare-earth alloys.
Foundries and fabs face uncertainties: many consumables and tool components rely on Chinese-sourced rare-earth materials. Cerium oxide used in CMP slurries, magnets in ion-implantation stages, and permanent magnets in precision motors are cited as hard-to-replace inputs. TSMC has previously warned that constrained procurement of key chemicals or materials is an operational risk, and some estimates put China-sourced consumables at roughly 30% for sub-7nm lines.
Equipment suppliers such as ASML may see shipment delays of weeks as they seek alternatives and coordinate with partners in the Netherlands and U.S. Memory makers and HDD suppliers are also exposed: advanced V‑NAND stacks and hard-drive spindle/voice-coil motors require heavy rare-earth magnets, potentially delaying Samsung’s V‑NAND and HDD production for vendors like Seagate and WDC.
Market outcomes will hinge on licensing implementation, alternative sourcing, and whether supply chains can re‑engineer around scarce rare-earth inputs.