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TechTech War

China’s new rare earth export controls will impact global chip supply chain, analysts say

The latest rules require ‘case-by-case approval’ on exports of rare earths for the design and production of advanced semiconductors

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China is the dominant global supplier of rare earths, which are critical for semiconductors. Photo: Shutterstock Images
Ann Caoin Shanghai
China’s latest export controls on rare earths are expected to have a direct impact on the global semiconductor supply chain, complicating the production of AI and memory chips from major US and South Korean suppliers, according to analysts.
On Thursday, China’s Ministry of Commerce imposed a raft of new export controls on rare earth materials critical for the chip manufacturing process. It imposed restrictions on the export of technologies related to rare earth production, such as mining, smelting and separation, magnetic material manufacturing, as well as the use and recycling of rare earth secondary resources.

The latest rules require “case-by-case approval” on exports of rare earths for the design and production of advanced semiconductors, including logic chips with process nodes of 14 nanometre or below and memory chips with 256 layers or more, as well as related equipment and materials for these semiconductors.

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The latest measures, regarded by analysts as a “major upgrade” of Beijing’s rare earth export control regime, were seen as a move to strengthen China’s leverage ahead of crucial negotiations with the US.
In April, Beijing placed export controls on seven critical minerals. Subsequently, Chinese exports of rare earth magnets slowed as tensions rose over the following months, sparking alarm among Western manufacturers.
Nvidia’s H100 Tensor Core graphics processing unit. Photo: Handout
Nvidia’s H100 Tensor Core graphics processing unit. Photo: Handout

“It is the first time for [rare earth] export control policies to mention semiconductors,” China Merchants Securities, a state-backed brokerage firm, wrote in a research note on Friday, adding that Beijing’s latest action represented “a new level of regulatory intensity”.

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