TSMC(US:TSM) Xin Lang Cai Jing·2025-10-14 10:46Core Viewpoint - China's new rare earth export control regulations are seen as a strategic countermeasure in the ongoing tech rivalry with the U.S., particularly targeting TSMC and the U.S. chip industry [1][9]. Group 1: New Regulations - The new regulations require authorization for exporting products containing over 0.1% of China's medium and heavy rare earths to third parties [1]. - Rare earth products used in 14nm and below logic chips, 256-layer and above storage chips, and related semiconductor equipment will require case-by-case approval [1]. Group 2: Dependence on Rare Earths - Rare earths are essential for modern high-tech industries, including chip manufacturing, military equipment, electric vehicles, and artificial intelligence [3]. - TSMC relies heavily on high-purity rare earth materials from mainland China, consuming approximately 6,000 tons annually, with 96% sourced from the mainland [3]. Group 3: U.S. Chip Industry Vulnerability - The U.S. has long attempted to suppress China's high-tech industry through various restrictions, but the dependence on Chinese rare earths makes the U.S. chip industry particularly vulnerable [5]. - Major U.S. chip companies like NVIDIA, Qualcomm, and Apple depend on TSMC for production, which in turn relies on mainland rare earths [5]. Group 4: Military Implications - Rare earths are crucial for U.S. military applications, impacting missile guidance systems, radar equipment, and high-performance motors [5]. - A disruption in rare earth supply from China could significantly weaken U.S. military capabilities [5]. Group 5: TSMC's Position - TSMC finds itself in a precarious position between the U.S. and China, struggling to balance its dependence on Chinese rare earths with its obligations to U.S. policies [7][8]. - Short-term diversification of supply chains or technological independence from mainland China is unlikely for TSMC [8]. Group 6: Strategic Implications - China's rare earth control policy is not just a countermeasure but part of a broader strategic positioning to secure its high-tech industry development [9]. - The ongoing rare earth competition reflects a larger reconfiguration of global industrial chains and the deeper geopolitical struggle between major powers [9].