Recently, the trade disputes between China and the United States have reached a pivotal juncture. As the world's foremost producer of rare earths, China accounted for a staggering 69% of global production in 2024. In 2025, it further tightened its grip by imposing stricter export controls on rare earth-related items and technologies. On October 9, the Ministry of Commerce issued an announcement detailing the implementation of export controls on certain overseas rare earth-related items and technologies that incorporate Chinese components. This strategic move is aimed at safeguarding national security and interests, as well as fulfilling international obligations, including those related to non-proliferation.

The implications of this policy shift are profound for semiconductor giants like TSMC. Their production processes are heavily reliant on Chinese rare earth elements and technologies. The newly imposed restrictions have the potential to disrupt supply chains, escalate production costs, and constrain production capacity. In the context of international trade and business operations, such disruptions can have cascading effects, influencing not only the companies directly involved but also the broader global market.