TSMC Seeks Chip Equipment Motors Free of Chinese Rare-Earth Magnets
The push is a hedge against China's export controls, which cover most of the permanent magnets used in such machinery.
TSMC, the largest contract chipmaker, has started asking its equipment suppliers for factory automation machines whose motors avoid rare-earth permanent magnets, a move aimed at limiting disruption from China's export controls, according to a Reuters report dated October 22. China supplies roughly 70% of global rare-earth mining and about 95% of the finished permanent magnets in such machinery, and since April 2025 it has required case-by-case export licences for seven medium and heavy rare earths and their magnets. Beijing's October 2025 expansion, which reached foreign-made goods containing more than 0.1% Chinese-origin rare earths, was suspended for a year and has since been extended by 90 days. Alternatives exist, including induction, switched-reluctance and ferrite-magnet motors, but each brings trade-offs in efficiency, size, power density, precision and control. Taiwan's ITRI is building a pilot rare-earth line meant to cover about half of domestic demand within three years, while the US has announced a $12 billion critical-minerals stockpile.
Why it matters
For the chip supply chain, the request shows how exposed advanced manufacturing is to a single country's rare-earth controls. China supplies most of the world's rare-earth mining and finished permanent magnets, and its licence rules have already changed what buyers face. Equipment makers asked to remove these magnets will have to weigh trade-offs in efficiency, size and precision against supply risk. Taiwan's planned domestic rare-earth line and the US stockpile suggest governments see the same dependence and are trying to reduce it.
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Sources
- Tom's Hardware