TSMC is seeking chipmaking equipment that doesn't contain Chinese rare-earth magnets
TSMC, the world's largest contract chip manufacturer, is seeking alternative machinery without rare-earth components to reduce its dependence on China-dominated materials and avoid disruptions to factory operations caused by the country's export controls.
According to a Reuters report on October 22 citing people familiar with the matter, the Taiwanese company has begun approaching its equipment suppliers to explore whether they can provide factory automation equipment equipped with motors that do not require rare-earth materials.
This initiative is a direct response to the tightening of export controls by China, which have threatened to disrupt the critical supply chains for the semiconductor industry. The move underscores the growing geopolitical risk for global tech manufacturers.
Strategic diversification
Rare-earth elements are essential for high-performance magnets used in motors and other precision components. By seeking alternatives, TSMC aims to diversify its supply base and reduce its vulnerability to geopolitical tensions.
The company is asking its suppliers to provide alternative motors that can function without these materials. This is a significant step in the ongoing effort to secure the supply chain for advanced semiconductor manufacturing.
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