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TSMC Seeks Chipmaking Equipment Without Chinese Rare-Earth Magnets
Key points
- TSMC seeks equipment without rare-earth magnets.
- Goal is to reduce dependence on China's rare-earth supply.
- China controls 70% of rare-earth mining, 95% of magnets.
- China implemented export controls on rare earths and magnets.
TSMC's Search for Alternative Equipment
TSMC, the world's largest contract chip manufacturer, has begun discussions with its equipment suppliers to explore options for factory automation machinery that does not require rare-earth materials. This initiative is a direct response to China's significant control over the global rare-earth supply chain and its recent implementation of export controls.
Dependence on Rare-Earth Magnets in Chip Manufacturing
TSMC's highly automated semiconductor fabrication plants utilize industrial machinery that relies on electric motors containing powerful permanent magnets. These magnets are typically made from rare-earth elements such as neodymium, dysprosium, and terbium. TSMC manufactures chips for major tech companies including Nvidia, Apple, Broadcom, and Qualcomm.
China's Dominance and Export Controls
China accounts for approximately 70% of global rare-earth mining and controls about 90% of refining and 95% of finished permanent magnets. This near-monopoly gives Beijing substantial influence over a critical technology supply chain. In April 2025, China placed several rare earths and their magnets under export controls, requiring specific approvals and licenses for export. These controls were expanded in October 2025 to include more rare earths and processing technology, though the expansion was later suspended and extended.
Mitigating Production Risks
TSMC's efforts are aimed at reducing the risk of production hindrances due to these export controls. A shortage of specialized motor components, even with other materials available, could complicate the maintenance, repair, or expansion of its production equipment. Alternative motor technologies, such as conventional induction motors, exist that do not require rare-earth magnets.
✨ This summary was generated by AI from the outlets' reporting listed below. It is not independently verified and may contain errors — check the original sources. How BrevFeed works →
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Reporting from
TSMC is asking equipment suppliers for factory automation machinery that does not use rare-earth magnets to reduce its reliance on China-dominated materials. This move aims to mitigate potential disruptions to its chip production caused by China's export controls on rare-earth elements and magnets.