One of the concerns that Apple CEO Tim Cook might have is the fear that an invasion of Taiwan by China could cut Apple off from receiving the chips that its devices need to work. This is a serious concern. Satellite imagery recently revealed that China created a mock version of Taipei including Taiwan’s Presidential Office. Taiwan President Lai Ching-te said last Friday that he will speed up the building of a shield over Taiwan that would protect the country from an aerial attack.
Despite reports putting Apple and other tech firms in a serious bind, the news turns out to be not as bad
Apple almost found itself in a very serious situation thanks to China's announcement last week that it would be tightening the vise on exports of rare earth materials. China wants to require licensing of end products made from the country's materials. China produces 90% of the world's rare earth materials and these materials are necessary to produce chips. They are used in the chips themselves to enhance their electrical, optical, and magnetic properties. Rare earth materials are also needed for the manufacturing of chips as a polishing agent. One of those materials only found in China is samarium. This is a rare earth material used by the U.S. to build F-35 fighter jets and missiles.
A report by the New York Times says that Bejing is cracking down on rare earth materials and the concern was that the country could force TSMC, Samsung, and SK hynix to obtain a license. This could have given China control over the cutting-edge chips produced by those foundries. In the worse-case scenario, Apple would not be able to have TSMC and even Samsung Foundry (if it comes to that) manufacture the chips it needs to power the iPhone and other products.
Apple CEO Tim Cook visits an Apple Store during last year's iPhone 16 release. | mage credit-Apple
However, Tim Cook can relax a little. On Sunday, Taiwan said that China's crackdown on rare earth materials don't impact the materials that are needed by foundries to build chips. China's curbs affect metals that are not needed by TSMC, Samsung or SK hynix according to Taiwan's economy ministry. Instead, the production of drones and electric vehicles could be impacted by China's new stance on its rare earth materials. Today, China defended its tougher stance by stating that it was concerned about the use of these materials in "military applications" during this time of "frequent military conflict." The new rules on China's rare earth materials will take effect on November 8th.
U.S. and other countries are working on rare earth alternatives
TSMC has different sources for its rare earth materials although most of these suppliers obtain the metals from China. While TSMC and the other foundries are getting a break now, there could be a time when China places the curbs on the materials that are used in the production of cutting-edge chips. Besides Apple, other major TSMC customers could be affected such as Nvidia, AMD, and Qualcomm.
Should consumers of tech gear be concerned?
Yes. This is a very serious matter.
75%
No. China won't play hardball.
0%
Not to worry. The U.S. will discover an alternative.
25%
Jimmy Goodrich, a senior fellow at the University of California Institute of Global Conflict and Cooperation said, "China is playing hardball. He says that the move "could position Beijing to have complete control of the global A.I. and modern electronics supply chain." But that was before it was determined that the metals that China is restricting access to are not used in the production of chips.
Should China decide to create serious problems for the rest of the world, it can always expand the crackdown on rare earth materials to include the metals used by foundries. U.S. companies have been working on domestic mining along with attempts to discover alternatives. The Department of War has awarded hundreds of millions of dollars to U.S. firms in an attempt to find a supply of rare earth materials outside of China. This task is now more important than ever before.
"Iconic Phones" is coming this Fall!
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Alan, an ardent smartphone enthusiast and a veteran writer at PhoneArena since 2009, has witnessed and chronicled the transformative years of mobile technology. Owning iconic phones from the original iPhone to the iPhone 15 Pro Max, he has seen smartphones evolve into a global phenomenon. Beyond smartphones, Alan has covered the emergence of tablets, smartwatches, and smart speakers.
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