【By Observer News, Xiong Chaoran】Faced with the U.S. government's irrational encirclement and suppression, China has launched a new regulation on rare earths as a "shock bomb," while ASML, the Dutch lithography manufacturer that previously became a tool for the U.S. to "choke" China, now finds itself in a difficult position.
According to a report by Bloomberg on October 10 local time, as the Sino-U.S. trade game continues, companies in the global semiconductor supply chain are preparing to deal with the impact of the escalating situation. A source familiar with the matter said that China's new rare earth regulations may cause ASML to experience shipment delays for several weeks, and the company is the only one in the world producing the most advanced semiconductor manufacturing equipment.
The report pointed out that the semiconductor manufacturing machines sold by ASML and Applied Materials are particularly dependent on rare earths because these devices include extremely precise lasers, magnets, and other components that use rare earth elements.
A source familiar with ASML said that the company is preparing for potential business disruptions, especially because the new Chinese regulations require foreign companies to obtain approval before re-exporting products containing Chinese rare earths. This source added that ASML is currently lobbying the Netherlands and its U.S. allies for alternative solutions. ASML declined to comment on this.
A senior manager at a major U.S. chip company said that the company is still assessing the potential impact, but the most obvious risk it faces is the rising price of rare earth magnets, which are crucial to the chip supply chain. Another U.S. chip company executive said that the company is urgently trying to determine which products contain rare earths from China and is concerned that China's export licensing system might cause its supply chain to stall.
ASML's high numerical aperture extreme ultraviolet system equipment ASML
"This is the strictest export control China has implemented so far," said Gracelin Baskaran, an expert on critical minerals at the Center for Strategic and International Studies (CSIS). "It is clear that they (China) have enough strength and leverage not only to make American companies comply with the new regulations, but also to make companies around the world comply."
Jacob Feldgoise, a senior data research analyst at the Center for Security and Emerging Technology at Georgetown University, said: "In the semiconductor value chain, China's new export control measures may have the greatest impact on chip manufacturers that use rare earth chemicals in the chip manufacturing process and tool manufacturers that integrate rare earth magnets into their equipment."
According to reports, some of the largest chip manufacturers in the world, including Intel, TSMC, and Samsung Electronics, rely on ASML's equipment to produce semiconductors. At present, Samsung Electronics and Intel have refused to comment, and TSMC did not respond to requests for comments.
Bloomberg reported that this is not the first time rare earths have become a focal point in the Sino-U.S. trade game. Earlier this year, President Trump imposed exorbitant tariffs on China, and China immediately took a series of precise countermeasures, including increasing tariffs and implementing export controls on seven types of heavy rare earth materials such as samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium. The Financial Times at the time cited industry insiders who said that China was establishing an export licensing system. In December 2024, China also announced strict controls on exports of gallium, germanium, antimony, superhard materials, and graphite-related dual-use items to the U.S.
After multiple rounds of tariff wars, since May this year, China and the United States held four rounds of economic and trade talks in Geneva, Switzerland; London, UK; Stockholm, Sweden; and Madrid, Spain.
Rare earth metals and magnets are essential materials for high-tech products such as smartphones, electric vehicles, and fighter jets. China has long realized their importance and has built a leading position globally in rare earth mining and processing over decades. Data shows that China controls about 70% of global rare earth mining, 90% of separation and processing, and 93% of magnet manufacturing.
China holds a dominant position in the global rare earth magnet market. The Financial Times chart
According to the new regulations published by the Chinese Ministry of Commerce on October 9, China will implement export controls on certain foreign rare earth-related items that contain Chinese components and rare earth-related technologies. The Financial Times stated that this means any foreign enterprise exporting magnets produced using Chinese rare earth components or Chinese rare earth mining, smelting, and magnet-making technologies must obtain Chinese approval.
The new regulations cover rare earth magnets and some semiconductor materials made abroad with 0.1% or more of Chinese heavy rare earth content, as well as certain items produced overseas using technologies related to Chinese rare earth mining, smelting and separation, metal smelting, magnet production, and recycling of rare earth secondary resources. These items will be subject to the new regulations starting December 1; for some items originally from China, the new regulations will take effect immediately.
Additionally, for most military applications, China will "principally not approve" export licenses. Export applications involving the development of AI with potential military uses will also be "reviewed on a case-by-case basis."
Reuters noted that on October 9, in addition to announcing two notices on strengthening the export control of rare earth-related items, China also announced several other notices on the same day. Not only were several new rare earth elements and dozens of rare earth processing equipment added to the export control list, but also items related to super-hard materials, lithium batteries, and artificial graphite anode materials. The report believes that these measures are important for Sino-U.S. trade negotiations and will help enhance China's influence.
U.S. media believe that the semiconductor supply chain is particularly vulnerable to China's measures, as large chip factories depend on an ecosystem of companies providing specialized equipment, complex processes, and final packaging.
In the past, both the Trump and Biden administrations have supported this industry through subsidies and other policies, but domestic capacity is still in its early stages. "This is a real pain point for U.S. AI companies," said Joseph Hoefer, Chief AI Officer at the lobbying firm Monument Advocacy.
As well as the U.S. being upset, Europe is also getting restless.
According to a report by Bloomberg, on October 10 local time, a spokesperson for the German Ministry of Economics responded to the new Chinese regulations by saying that it is too early to assess the impact of the regulations, but Germany is "currently conducting in-depth discussions at the national and EU levels on this issue." The spokesperson then claimed that China's increasingly tight restrictions on the export of key minerals in the technology sector "cause great concern" and stated that Germany must reduce its reliance on supplies outside the European Economic Area.
According to a report by The New York Times, the day before (October 9), Olov Gil, a spokesperson for the European Commission, said at a press conference that the European Commission expressed concern about China's latest export restrictions. He also said, "The European Commission hopes China will demonstrate a reliable partner attitude, ensuring a stable and predictable supply of critical raw materials."
On October 9, the spokesperson for the Ministry of Commerce of China responded to inquiries regarding the strengthened export control of rare earth-related items by stating that rare earth-related items have dual-use attributes and that implementing export controls is a common international practice. Therefore, the Chinese government is legally regulating certain foreign rare earth-related items containing Chinese components, aiming to better safeguard national security and interests, and better fulfill international obligations such as non-proliferation.
As a responsible major country, China's implementation of controls on relevant items reflects its firm commitment to maintaining world peace and regional stability, and actively participating in international efforts to prevent proliferation. China is willing to strengthen communication and cooperation with all parties through multilateral and bilateral export control dialogue mechanisms, promote compliant trade, and ensure the safety and stability of the global industrial chain and supply chain.
This article is an exclusive article by Observer News. Without permission, it cannot be reprinted.
Original: https://www.toutiao.com/article/7559788881680302602/
Statement: The article represents the views of the author. Please express your opinion by clicking on the 【top/down】 buttons below.