TSMC(US:TSM) Sou Hu Cai Jing·2025-11-15 02:16Core Insights - TSMC's chairman, Wei Zhejia, has signaled a critical shortage of rare earth materials, indicating a plea for assistance from mainland China, which reflects deeper geopolitical tensions in the semiconductor industry [1][3] - China's dominance in rare earth processing and technology creates a significant leverage point in the global semiconductor supply chain, with 92.3% of global refining capacity and 60% of core patents held by China [1][2] - The reliance on rare earth materials, particularly neodymium-iron-boron magnets used in advanced EUV lithography machines, poses a substantial risk to TSMC's production capabilities, especially as the demand for advanced chips increases [2][3] Industry Analysis - The U.S. has struggled to achieve rare earth independence, with 90% of materials from the Mountain Pass mine still needing to be processed in China, highlighting the inefficiencies and high costs of domestic production [2] - TSMC's advanced manufacturing processes are increasingly vulnerable, as the consumption of rare earth materials in 5nm chips is three times that of 14nm chips, making supply chain disruptions particularly damaging [2][3] - The geopolitical landscape is shifting, with TSMC being forced to relocate advanced manufacturing to the U.S., despite higher costs, indicating a loss of operational autonomy and a response to external pressures [3][4] Strategic Implications - The rare earth crisis underscores a new paradigm in technology leadership, where control over upstream supply chains is as critical as technological prowess [4] - TSMC's predicament reflects broader challenges faced by global companies navigating geopolitical tensions, emphasizing the need for robust supply chain strategies [4]