China's new rare earth export controls will impact global chip supply chain, analysts say

Core Insights - China's new export controls on rare earths are expected to directly impact the global semiconductor supply chain, complicating the production of AI and memory chips from major US and South Korean suppliers [1] Export Controls Overview - The Ministry of Commerce in China has imposed new export controls on rare earth materials critical for chip manufacturing, including restrictions on technologies related to mining, smelting, separation, and recycling of rare earth resources [2] - The new regulations require "case-by-case approval" for exports of rare earths used in the design and production of advanced semiconductors, specifically targeting logic chips with process nodes of 14 nanometers or below and memory chips with 256 layers or more [3] Strategic Implications - Analysts view these measures as a "major upgrade" of China's rare earth export control regime, aimed at strengthening China's leverage in upcoming negotiations with the US [4] - The recent controls are the first to specifically mention semiconductors, indicating a new level of regulatory intensity from Beijing [6] Market Impact - Rare earth elements are essential for various semiconductor manufacturing processes, including etching, lithography, and testing machines, and the new export controls are expected to significantly restrict overseas semiconductor production expansion [7] - China dominates the rare earth market, accounting for approximately 70% of global rare earth mining and 90% of global processing capacity [7]