Taiwan’s mega-chipmaker, Taiwan Semiconductor Manufacturing Company, is seeking factory equipment that doesn’t rely on rare earths. It is “aiming to reduce the risk that Beijing’s export controls could disrupt operations at plants that make the world’s most advanced chips” (Reuters, October 22, 2026).
The move, reported for the first time, underscores how China’s grip on rare earths has become a vulnerability for the global semiconductor industry after the country last year put certain rare-earth materials, magnets and related processing technology under export controls, requiring licences.
Rare-earth magnets are commonly used in motors that power moving parts in industrial equipment, including machinery found in highly automated factories such as those operated by TSMC. A shortage of such specialised parts could disrupt chip production for customers in smartphone, AI system, data centre and defence supply chains.
Discussions with suppliers are an “early stage.” If any new equipment unencumbered by rare earths is being used in its factories, TSMC isn’t talking about it. But sources tell Reuters that the firm’s efforts have “not yet resulted in a broad rollout of rare-earth-free equipment.”
Meanwhile, Taipei is promoting efforts to develop rare-earth and critical-mineral supply chains that would be independent of Beijing.
In July 2025 in these pages, James Roth argued for making things without the rare earths for just such reasons as motivating TSMC.
Who needs this stuff? You’ll hear that you “cannot build a modern car without rare earths,” but then you’ll read that “auto parts suppliers Aptiv and BorgWarner announced that they were developing motors with minimal or no rare earth content to counter supply constraints.”…
The market’s demands will change over time. One can do as Aptiv and BorgWarner are doing now and learn to do without, or one can bet heavily on status quo technology that that will be obsolete by the time a U.S. rare earths supply chain is built.
Today, Taiwan Semiconductor Manufacturing Company. Tomorrow…the world?
