Taiwan Semiconductor Manufacturing Co. (TSMC) is exploring factory equipment that does not rely on rare-earth components, in response to Beijing’s export controls on the materials. Rare-earths are essential to motors in advanced manufacturing equipment. Discussions with suppliers are at an early stage, and TSMC aims to reduce its exposure to potential supply disruptions from China.
The effort highlights growing geopolitical pressure on the semiconductor industry and TSMC’s steps to de-risk its supply chain. A shortage of specialized parts containing rare-earth magnets could interrupt production of the world’s most advanced chips, affecting industries from smartphones to defense. The United States and Taiwanese governments have expressed support for developing alternative sources of critical minerals.