No Major Impact From China’s New Rules, Says Taiwan

Taiwan’s semiconductor industry is not expected to see a significant impact from China’s new curbs on rare earth exports, as they are different from the metals required for the chip sector, the island’s economy ministry said on Sunday. 

On Thursday, China expanded its controls on rare earths exports, adding five new elements and extra scrutiny for chip users as Beijing pulls control over the sector ahead of the meeting between President Donald Trump and Xi Jinping. 

In a statement, the Taiwan Economy Ministry said that China’s new rule, which covers rare earth elements, differs from the rare earth items needed in Taiwan’s semiconductor processes, which is why no major impact is expected this time. 

Additionally, domestic products or derivatives that contain rare earths are primarily sourced from Europe, the US, and Japan. 

Taiwan is the headquarters of the world’s largest contract chipmaker, TSMC, which manufactures the vast majority of advanced chips that are a main component of Artificial Intelligence applications.

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Moreover, the ministry stated that China’s recent expansion of controls could impact the global supply chains for products such as electric vehicles and drones, noting that the effect will need to be closely monitored.