Taiwan sees no significant impact on chip sector from China rare earths curbs

Taiwan’s economy ministry said in a statement about China’s new rules that the rare-earth elements covered by the expanded ban differ from the rare-earth items required in Taiwan’s semiconductor processes, so no significant impact on chip manufacturing is expected at this time.

Domestically needed products or derivatives containing rare earths are mainly sourced from Europe, the United States, and Japan, it added.

Taiwan is home to the world’s largest contract chipmaker TSMC, the producer of the vast majority of advanced chips that are a key component of artificial intelligence applications.

However, the ministry added that China’s latest expansion of controls could affect global supply chains for products such as electric vehicles and drones, adding the impact will need to be closely watched.

Earlier on Sunday, China defended its curbs on exports of rare earth elements and equipment, saying they were motivated by concern about these metals’ military applications at a time of “frequent military conflict”.