Businesses across the global semiconductor supply chain are bracing themselves for disruptions from China’s most targeted move yet to limit their supplies of rare-earth materials as part of an escalating trade war between the Asian nation and the U.S.
The restrictions may lead to weekslong delays in shipments for ASML Holding NV, the only manufacturer in the world of machines that make the most advanced semiconductors, a person familiar with the company said. The company is preparing for disruptions, particularly due to a clause that requires foreign firms to seek China’s approval for re-exports of products containing its rare earths, said the person, who asked not to be identified discussing private matters and noted that ASML is lobbying Dutch and U.S. allies for alternatives. The company declined to comment.
A senior manager at a major U.S. chip company said the firm is still assessing potential impacts. But the clearest risk the company is facing now is an increase in the prices of rare earths-dependent magnets that are critical to the chip supply chain, the person said, asking not to be identified discussing operations. An official at another U.S. chip company said the business is rushing to identify which of its products contain rare earths from China and is worried that the country’s requirement for licenses will grind its supply chain to a halt.
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