The world's slide supply chain is falling out of China's rare earth curbs

Businesses across the global semiconductor supply chain are weakening themselves due to disruptions of China’s most purposeful move, but to limit their supplies of rare earth, which are critical to building the discs that promote the boom in artificial intelligence. The restrictions could delay the shipping for ASML Holding NV, which sells machines that make the world’s most advanced semiconductors for weeks, said a person familiar with the company. The company is preparing for disruptions, especially as a result of a clause that requires foreign firms to seek the approval of China for the re -execution of products containing its rare earth, said the person, who asked not to be identified, discussed private matters and noticed that asml Dutch and US allies for alternatives. The company declined to comment. A senior manager at a major US chip business said the firm still assesses potential consequences. But the clearest risk facing the business now is an increase in the prices of rare earthly dependent magnets that are critical to the chip’s supply chain, the person said and asked not to be identified. An official at another US Chip business said the business is identifying which of its products rarely contains rare earth from China and is concerned that the country’s licenses requirement will stop its supply chain. The restrictions represent the first major effort of Beijing to exert long-arm jurisdiction over foreign businesses to target the semiconductor and AI industries. They require overseas firms to get approval for the shipment of any material that contains even trace quantities of Chinese rare earth – and explicitly calls out parts used to make certain computer chips and promote AI research with military applications. Disc machines, such as those provided by ASML and Applied Materials Inc. sold is especially dependent on rare earth because it contains exceptionally precise lasers, magnets and other equipment that use these elements. “These are the most stringent export controls used by China,” says Gracelin Baskaran, a critical mineral-focused director at the Center for Strategic and International Studies. “It is very clear that they have the sticks and leverage, not only US firms, but companies worldwide.” Some people have questioned how long the restrictions will last, and consider them potential attitude before a trip to Asia planned US President Donald Trump, which is expected to include a meeting with Chinese President Xi Jinping later this month. It is unclear how China would even detect rare earth at such discrete levels to enforce the rules. On Friday, Trump threatened to completely call off his meeting with XI, describing the new rare earth controls as “hostile” and threatening a “massive increase” of rates on goods from China. “I’ve always felt they were waiting, and now, as usual, I’m proven right! There is no way China should be allowed to ‘imprison the world’, ‘Trump said in a post about Truth Social. ‘The US also has monopoly positions, much stronger and more far -reaching than that of China. I just didn’t choose to use it, there was never a reason for me to do it – until now! ‘ The world’s largest chipmakers, including Intel Corp., Taiwan Semiconductor Manufacturing Co. and Samsung Electronics Co., rely on ASML to produce semiconductors. Samsung and Intel declined to comment. TSMC did not respond to a request for comment. An official of the White House said the government and appropriate agencies assessed any impact of the new rules, which were announced without notice and in an apparent effort to exercise control over the world’s technology provision chains. The US House Select Committee on China brought the Asian nation to the relocation and described the restrictions as “an economic declaration of war against the US.” The chairman of the committee, John Moolenaar, a Republican, said in a statement on Thursday that China “fired a loaded gun on the US economy.” Germany, the largest economy of Europe, has already put in place measures to diversify its supply of raw materials, and its economic ministry on Friday called a ‘big concern’. The government said it was in close contact with the affected companies and the European commission to respond. Taiwan mainly relies on Europe, the US and Japan for rare earth supplies. “We still need further assessment before deciding on the impact on our overall industry,” the country’s Ministry of Economic Affairs said in a statement. “We will continue to monitor the indirect impact of fluctuations in the price of raw materials and adjustments of the supply chain.” With the help of Josh Wingrove, Kamil Kowalcze, Michael Nienaber, Petra Sorge, Yuki Furukawa, Christina Kyriasoglou, Joe Deaux, Mackenzie Hawkins and Josh Xiao. © 2025 Bloomberg MP This article was generated from an automatic news agency feed without edits to text.