TSMC Reportedly Seeks Chipmaking Equipment Without Chinese Rare-Earth Magnets

TSMC has begun approaching its equipment suppliers to explore whether they can provide factory automation machinery equipped with electric motors that do not require rare-earth materials, according to a Reuters report on October 22 citing people familiar with the matter. The International Energy Agency states that China controls around 90% of global rare-earth refining and approximately 95% of the finished permanent magnets used in TSMC's machines, while the U.S. Geological Survey estimates China accounts for roughly 70% of global rare-earth mining. Beijing placed seven medium and heavy rare earths and their magnets under export controls in April 2025, followed by an October 9, 2025 expansion covering five more elements and foreign-made products containing more than 0.1% Chinese-origin rare earths—a measure suspended until November 10, 2026, and subsequently extended by 90 days. Replacing permanent magnets made from elements like neodymium, dysprosium, and terbium with conventional induction, switched-reluctance, or ferrite-magnet motors carries operational trade-offs in efficiency, size, power density, and precision. Taiwan's government is backing the Industrial Technology Research Institute to build a pilot production line within three years to meet about 50% of domestic rare-earth demand, alongside a February 2026 U.S. plan to establish a $12B critical minerals stockpile.