Chipmakers still suffering from rare earth shortages, says report — US-China trade truce apparently still hasn’t eased pressures despite agreement taking place in October last year

Source: Tom’s Hardware

Image credit: Getty / Bloomberg

Report Overview

A new report says that suppliers delivering rare‑earth materials to semiconductor manufacturers are facing limited supply, despite the U.S. and China agreeing to a truce on the escalating trade war in October 2025. According to Reuters, U.S. firms are having trouble securing export licenses from China for scandium, which is essential for making 5G chips used in smartphones and cellular base stations.

Although most of this material is sourced through third‑party suppliers, Beijing requires exporters to declare their end‑users to acquire a license (source). The requirement affects not only scandium but nearly every Chinese‑origin rare earth that can be used to manufacture logic chips at 14 nm or smaller or memory chips with 256 layers or more (details).

China’s Export Controls

China first applied restrictions to critical minerals in December 2024, but the most impactful export control came in April 2025 in response to President Donald Trump’s tariffs. The controls extend beyond the raw materials themselves; they also include processing tools and methods needed to produce advanced semiconductors (analysis). This means that countries seeking to offset the shortfall caused by the export controls cannot simply purchase the technology and equipment required to replace the missing supply.