Taiwan Asserts China’s Rare Earth Rules Pose No Threat to TSMC or Chip Supply

Taiwan's Ministry of Economic Affairs has dismissed concerns that China's new restrictions on rare earth exports will disrupt the island's semiconductor industry. The materials targeted by Beijing differ from those used in chip production, with Taiwan sourcing most rare earths from Europe, the U.S., and Japan. This diversified supply chain ensures stability for Taiwan Semiconductor Manufacturing Company (TSMC), the world's leading producer of advanced AI chips.

While TSMC remains insulated, broader industries face potential turbulence. China now mandates government approval for exports containing more than 0.1% of certain rare earths—a MOVE that could slow production for electric vehicle and drone manufacturers. Dutch firm ASML Holding, which produces critical chipmaking equipment, may encounter shipping delays due to the new review process.

The geopolitical chess game continues as trade tensions between Washington and Beijing intensify. Yet Taiwan's chip dominance appears secure for now, with officials stating there's no imminent risk of shortages. The island's strategic supply chain diversification proves its worth amidst growing global trade fragmentation.