TSMC(US:TSM) Xin Lang Cai Jing·2025-10-25 22:18Core Viewpoint - TSMC is facing a critical shortage of rare earth materials necessary for chip production at its Arizona factory, with only 30 days of inventory left, raising concerns about its operational capacity and future strategies [1][9]. Group 1: TSMC's Current Situation - TSMC plans to expand capacity and upgrade technology at its U.S. factory, but is hindered by a shortage of rare earth materials, primarily sourced from mainland China [2][8]. - The company is particularly reliant on heavy rare earth elements like neodymium, dysprosium, and terbium, which are essential for chip performance [4][6]. Group 2: China's Role in Rare Earth Supply - China holds 37% of the world's rare earth reserves and produces over 70% of the global supply, making it a critical player in the semiconductor supply chain [5][6]. - Recent stricter export controls by China, requiring approval from the Ministry of Commerce for products containing Chinese rare earths, have directly impacted TSMC's material supply [6][8]. Group 3: Geopolitical Implications - TSMC's challenges reflect the intensifying tech competition between the U.S. and China, with the U.S. providing subsidies to semiconductor firms while imposing restrictions on China's chip industry [7][9]. - China's enhanced control over rare earth exports is seen as a countermeasure to U.S. technological dominance, complicating TSMC's operational decisions [8][10]. Group 4: Strategic Choices for TSMC - There is ongoing debate about whether TSMC should seek collaboration with mainland China, leveraging its advanced technology alongside China's resources and market potential [8][9]. - The company's future decisions regarding its alignment with either the U.S. or China will significantly influence its operational strategy and market positioning [9][10].