ASML warns of delays as China restricts rare earth exports
Beijing’s latest move threatens to disrupt the world’s most advanced chipmaking operations.
Companies across the global semiconductor industry are bracing for severe disruptions in the supply of chips and key components following new export restrictions imposed by China on critical minerals and rare metals.
According to a Bloomberg report, Dutch company ASML, the world’s only manufacturer of machines used to produce the most advanced chips, is expecting shipment delays of several weeks.
Last week, amid an escalating trade war with the United States, China tightened export controls on rare earth elements and other materials essential to the chip industry. The new rules require foreign companies to obtain government approval even for small exports and to specify how the materials will be used. The restrictions specifically target elements used in semiconductors and advanced AI technologies with potential military applications.
The measures are expected to hit chip companies hard. A senior executive at a U.S. semiconductor firm told Bloomberg that while the industry is still assessing the potential impact, the most immediate concern is rising prices for rare earth magnets, crucial components in the chip supply chain. Another executive said their company is working to identify which products rely on Chinese-sourced rare earth elements and fears that the new licensing requirements could bring production to a complete halt.
Chipmaking equipment, such as that produced by ASML and Applied Materials, is particularly dependent on rare earth elements used in high-precision lasers, magnets, and other critical components. ASML is reportedly preparing for significant disruption given the need to obtain export licenses for products containing these materials.
