Core Viewpoint - The intensifying US-China tech rivalry is shifting from chip restrictions to a strategic competition over rare earth resources [1][3] Group 1: Company Impact - Micron Technology plans to exit the Chinese data center server chip business, following Nvidia's similar move, highlighting the escalation of the US-China tech conflict [2][3] - Micron's revenue from mainland China was approximately $3.4 billion, accounting for 12% of its total global revenue [5] - The exit is seen as a business adjustment, but it is significantly influenced by China's new rare earth export regulations [6] Group 2: Industry Implications - China's Ministry of Commerce has implemented strict controls on rare earth exports, requiring approval for any products containing Chinese rare earth materials or technologies [6] - This policy affects not only rare earth materials but also processing equipment, technical personnel, and the entire supply chain, impacting the global chip industry [6] - TSMC is particularly vulnerable due to its reliance on heavy rare earth materials for its advanced 3nm process technology, which could lead to a rapid decline in production yield if supply is restricted [7] - ASML, a Dutch lithography giant, is also affected as its EUV lithography machines depend heavily on rare earth materials sourced from China [9] Group 3: Global Supply Chain Dynamics - China controls 90% of the global rare earth refining capacity, while Western countries lag in rare earth development and technology [9] - The rare earth resources have become a key leverage point for China in the US-China tech war, as the US attempts to cut off China's chip development through technology restrictions [9][13] - The G7 finance ministers reached a consensus on reducing dependence on Chinese rare earths, but achieving this goal in the short term is challenging due to the complexity of refining technologies [10][11] - Countries like Australia and the US are trying to accelerate rare earth resource development, but effective production capacity is unlikely to materialize quickly [12] Group 4: Future Outlook - Micron's exit is a microcosm of the broader US-China tech conflict, with the escalation of rare earth policies reshaping the global tech supply chain [13] - China is transitioning from a "role player" in the supply chain to a dominant force capable of altering the rules of global tech competition [13] - The deepening of rare earth policies will complicate the trajectory of the US-China tech war and lead to profound changes in the global tech industry [13]

Core Viewpoint - The G7 countries are attempting to address their dependency on Chinese rare earth elements through strategies that include setting price floors and imposing tariffs on Chinese exports, despite the inherent contradictions in their approach [5][7][14]. Group 1: G7 Strategies - The G7 is considering two main strategies to counter China's dominance in the rare earth market: establishing a price floor for rare earth transactions and increasing tariffs on Chinese rare earth exports [3][5]. - The rationale behind setting a price floor is to support domestic rare earth companies in G7 countries, as Chinese rare earths are significantly cheaper due to economies of scale [7][8]. - Imposing tariffs is intended to create leverage in negotiations with China, although this could backfire by increasing costs for Western consumers reliant on Chinese rare earths [8][14]. Group 2: China's Response - China has already implemented export controls on key rare earth elements, which are critical for various high-tech and defense applications, directly impacting Western industries [9][12]. - The country has established a stringent regulatory framework for rare earths, including electronic tracking of the supply chain and severe penalties for smuggling [9][11]. - China holds a dominant position in rare earth technology, possessing the majority of essential patents, which complicates efforts by G7 countries to develop alternative supply chains [11][12]. Group 3: Challenges for G7 - The G7 faces internal trust issues among member countries, complicating efforts to create a unified alternative supply chain [14][16]. - Environmental concerns and higher operational costs in G7 countries hinder the development of domestic rare earth production capabilities [16]. - Time is of the essence, as China is rapidly expanding its global rare earth resource footprint, making it increasingly difficult for G7 countries to catch up [16][19]. Group 4: The Need for Cooperation - The ongoing rare earth conflict reflects a Cold War mentality, with G7 countries attempting to isolate China while China maintains an open and cooperative stance [17][21]. - The ultimate battleground in the rare earth dispute is technological innovation, where China is making significant advancements, potentially widening the gap with G7 countries [19][21]. - A collaborative approach focusing on enhancing rare earth utilization efficiency could benefit all parties involved, rather than continuing a divisive political strategy [21].