Taiwan aims to be self-sufficient in 50% of its rare earth demand, setting a timetable to reduce the risk of China cutting off supply

China’s rare earth export controls are fueling concerns about industrial supply chains. (Reuters)

[Financial Channel/Comprehensive Report] Zhang Peiren, president of the Industrial Research Institute, said that the Industrial Research Institute plans to build a rare earth demonstration factory with an annual output of 500 tons by the end of 2030, making Taiwan self-sufficient in 50% of its needs. Zhang Peiren said China's export controls have heightened concerns about industrial supply chains.

Zhang Peiren said in a recent interview with Central News Agency that there is a rare earth experimental line in the Industrial Research Institute, and it plans to further build a demonstration factory in the industrial zone. The construction is expected to be completed by the end of 2028, and then work will begin to improve production to achieve the expected output. It will reach an annual output of 500 tons by the end of 2030, making Taiwan self-sufficient in 50% of its needs.

ITRI ​​plans to locate the factory in an industrial park for eventual handover to a private company. Zhang Peiren said funds would need to be allocated by the National Science and Technology Commission, while commercial arrangements, including price guarantees that the government might provide to investors, were still under discussion.

Zhang Peiren said that Taiwan’s demand for rare earths is relatively small, but these materials are indispensable. Therefore, the Ministry of Economy hopes to develop domestic supply chains and expand production capacity to address concerns about export restrictions.

China’s control measures highlight risks in the supply of industrial equipment parts in addition to raw materials.

The media also reported a few days ago that supply chain news pointed out that TSMC is asking suppliers to understand the feasibility of using rare earth-free motors in factory automation equipment to reduce the risk of chain interruption caused by China's restriction of rare earth supply. Industry insiders said that relevant discussions are still in the early stages and have not yet been introduced on a large scale.