"TSMC Seeks Alternative Parts to Reduce Dependence on Chinese Rare Earths"

Taiwan's TSMC, the world's largest contract chipmaker (foundry), is reportedly exploring alternative parts to reduce its reliance on Chinese rare earths.

Citing three anonymous sources, Reuters reported on the 22nd (local time) that TSMC has surveyed partners on applying rare earth-free motors to factory automation equipment in an effort to mitigate the risk of production disruptions stemming from China's rare earth export controls.

The sources are industry executives who were briefed by TSMC on the plans, with two of them noting that discussions are still in the early stages and a widespread rollout of rare earth-free equipment is not yet imminent.

TSMC declined to comment to Reuters.

Reuters assessed that TSMC's move illustrates how vulnerable the global semiconductor industry is to China's rare earth export controls.

Rare earth magnets are generally used in the motors of moving parts within industrial equipment. A shortage of such specialized components could disrupt semiconductor production, which in turn could have a widespread impact on artificial intelligence (AI) systems, data center construction, smartphone manufacturing, and the defense industry.

The United States and Taiwan previously announced that they would begin exploring ways to reduce their dependence on Chinese rare earths and critical minerals.

Taiwan's Economic Minister Kuo Jyh-huei stated last February that Taiwan plans to support rare earth technology development by the Industrial Technology Research Institute (ITRI) and build a pilot production line capable of meeting 50% of Taiwan's rare earth demand within three years.

A source at a U.S. think tank said that U.S. officials have taken a particular interest in ITRI's project and have discussed ways to diversify critical mineral supply chains with ITRI.

The U.S. State Department declined to comment on Reuters' request for comment, while ITRI stated only that it is cooperating with the department in charge under Taiwan's Ministry of Economic Affairs.

(Photo: AP, Yonhap News)
※ Please note: This article was translated by AI and may contain errors.