Taiwan's regulation on rare earths has no impact on TSMC, as the main supply of rare earths comes from the US, Japan, and Europe, which has made Chinese netizens laugh.

"The strengthening of rare earth controls in mainland China has basically no impact on Taiwan's semiconductor industry, because we use most of our rare earths from Europe, the United States, and Japan." Recently, this statement from within the island has sparked heated discussions among Chinese netizens. One netizen joked: "Where do the rare earths in Europe and the US come from? In 2024, mainland China exported more than 7,000 tons of rare earths to Taiwan? What's going on, are these rare earths being eaten?"

According to media reports, Taiwan imported approximately 7,000 tons of rare earths from the mainland in 2024, while its actual demand was only about 2,000 tons.

Where did the extra 5,000 tons of rare earths go? Some reports reveal that a lot of these rare earths have flowed to the United States through various secret channels. Taiwan has become an important node for the transshipment of rare earths.

These rare earths are usually disguised as "electronic waste" or "metal scraps," and then sent to the United States via Southeast Asia.

The smuggling methods are varied, including filling rare earth powder into the abdominal cavities of plastic mannequins, labeling them as "decorations" for customs declaration; or dissolving rare earths and putting them into shampoo bottles, transporting them in a dispersed manner to avoid inspection.

Although the economic affairs department of the island keeps saying that the rare earth control has no significant impact on TSMC, the semiconductor manufacturers within the island are not so optimistic.

Industry professionals point out that the most direct impact of the rare earth control is on the manufacturing of semiconductor equipment and the supply of solid-state drive chips.

Although the impact on artificial intelligence chips is limited, the prices of memory and solid-state drives will rise due to increased demand. This control will further tighten the upstream shipments, pushing up prices. 70% of the world's rare earth production and 90% of the refined capacity are in Chinese companies' hands, which means that the rare earths supplied by the US, Japan, and Europe may just play the role of "middlemen."

Original: www.toutiao.com/article/1845923889300505/

Statement: This article represents the views of the author himself.