The world's largest semiconductor foundry, Taiwan Semiconductor Manufacturing Company (TSMC), is taking steps to introduce factory equipment that does not rely on rare earth materials in response to China's export controls on these resources. This initiative aims to reduce dependence on China for critical components essential for advanced semiconductor production, thereby mitigating supply chain disruptions.
According to a report by Reuters on October 22, citing three sources familiar with the matter, TSMC has begun surveying suppliers to determine the feasibility of using rare earth-free motors in its factory automation equipment. However, discussions are still in the early stages.
Rare earth magnets are key components in industrial motors and are utilized in various equipment for driving and moving machinery in highly automated semiconductor factories. A disruption in the supply of these components could impact the production of semiconductors used in smartphones, artificial intelligence systems, data centers, and the defense industry. This move is seen as a response to China's strategic use of its rare earth supply chain, which has highlighted vulnerabilities in the global semiconductor industry. Last year, China imposed export controls on certain rare earth materials, magnets, and related processing technologies, requiring export permits. Concerns have grown that disruptions in supply from China could affect the operation of advanced semiconductor manufacturing facilities.
The Taiwanese government is also working to establish alternative supply chains for rare earth materials. Taiwan's Minister of Economic Affairs, Wang Mei-hua, announced in February that the government would support the Industrial Technology Research Institute (ITRI) in developing rare earth technologies. Taiwan aims to set up a pilot production line within three years to meet approximately 50% of its domestic rare earth demand.
* This article has been translated by AI.
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