Reuters: TSMC Seeks Rare-Earth-Free Components to Mitigate China Export Risks
TSMC is evaluating the use of rare-earth-free motors in its factory automation equipment to reduce supply chain disruption risks from Chinese export controls, though discussions remain in early stages.
According to an exclusive Reuters report, Taiwan Semiconductor Manufacturing Co. (TSMC) is seeking alternatives to rare-earth components in its factory equipment to mitigate the risk that Chinese government export controls could disrupt operations at the world's most advanced chip production hubs.
Rare-earth magnets are widely used in motors that drive moving parts in industrial equipment, including machinery used in highly automated factories like those operated by TSMC. A shortage of these specialized components could interfere with chip production, affecting customers in smartphones, artificial intelligence (AI) systems, data centers, and defense supply chains.
Three industry executives who received briefings from TSMC revealed that the company has consulted suppliers on the feasibility of adopting rare-earth-free motors in its factory automation equipment. One source stated that this move stems from concerns about potential supply disruptions caused by China.
The discussions are still in their initial stages and have not yet led to a large-scale adoption of rare-earth-free equipment. TSMC did not immediately respond to a request for comment.