Taiwan says China's rare earth export controls won’t impact its chip industry, but experts warn global tech supply chains may still face disruption.
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| Taiwan downplays risk to semiconductor production from China’s rare earth restrictions, but potential disruptions in tech-related industries remain. Image: CH |
Taipei, Taiwan — October 13, 2025:
Taiwan's government has sought to calm global concerns about the impact of China's expanded rare earth export controls, assuring that the restrictions are unlikely to affect the island's critical semiconductor industry. In a statement released Sunday, Taiwan's Ministry of Economic Affairs said the newly listed elements under Beijing’s control do not overlap with those typically used in advanced chip manufacturing processes.
China announced the new restrictions last week, adding five additional rare earth elements to its list of regulated exports. The move comes amid increasing geopolitical friction and just ahead of anticipated talks between U.S. President Donald Trump and Chinese President Xi Jinping. Beijing cited national security concerns, particularly the potential military applications of these metals, as justification for the tighter rules.
Taiwan, home to TSMC—the world’s largest contract chipmaker and a key player in the global AI and electronics supply chain—clarified that it does not heavily rely on China for rare earth inputs crucial to semiconductor production. Instead, Taiwan sources most of its needed rare earth products and derivatives from countries like the United States, Japan, and European nations.
Still, while the immediate threat to chipmaking appears minimal, the ministry acknowledged a broader risk to international supply chains. The rare earths now under restriction are more commonly used in the production of electric vehicles, drones, and other high-tech goods. Any disruption in their availability could ripple through adjacent industries, including Taiwan's own exports in those sectors.
Analysts warn that Beijing's move may be less about direct economic disruption and more about signaling strategic leverage. China controls more than 80% of the world’s rare earth refining capacity, making any export-related shift a potential flashpoint in tech-centered geopolitical competition. The decision to intensify scrutiny over materials with potential defense applications also aligns with rising military tensions in Asia and beyond.
For Taiwan, the episode serves as both reassurance and warning. While its chip sector remains insulated from this specific wave of export curbs, the island’s central role in global technology manufacturing means it cannot remain untouched by shifts in resource control and political signaling. The Ministry of Economic Affairs said it would continue to monitor the situation, especially with regard to Taiwan’s broader manufacturing ecosystem and its dependencies on high-tech raw materials.
As the world’s reliance on semiconductors—and on Taiwan as a source—continues to grow, so too does the strategic significance of materials like rare earths. China's latest export controls may not pose an immediate threat to chip fabrication, but they underscore how quickly tech supply chains can be politicized in an era of intensifying great power rivalry.