TSMC is exploring factory equipment with fewer or no rare-earth components to reduce the risk that Chinese export controls disrupt its chip plants. The effort is at an early stage and has not led to a broad rollout, three people familiar with the matter said.
TSMC has surveyed suppliers about using rare-earth-free motors in factory-automation equipment, three industry executives briefed on the plans said. One person said concerns about potential supply disruptions from China drove the effort. The discussions are at an early stage and have not resulted in a broad rollout; TSMC declined to comment.
Rare-earth magnets are used in motors that power moving parts in industrial equipment, including machinery in TSMC’s highly automated factories. A shortage of specialized parts could disrupt chip production for customers in smartphone, AI system, data centre and defence supply chains. The effort follows statements from the United States and Taiwan about reducing reliance on Chinese rare-earth and critical-mineral supply chains.
