Taiwan plans to build rare earths plant

SUPPLY CHAIN CONCERNS: China’s controls over rare earths have highlighted risks beyond the supply of raw materials to components used in industrial equipment

The Industrial Technology Research Institute (ITRI) plans to build a rare-earth demonstration plant that could meet half the nation’s needs by the end of 2030, as Chinese export controls heighten concerns over industrial supply chains, the institute president said.

In the planning stage, the facility aims to produce 500 tonnes of rare earths annually, ITRI president Chang Pei-zen (張培仁) said in a recent interview.

Construction is targeted for completion by the end of 2028, followed by work to refine production processes and reach the planned output.

A periodic table shows rare earth elements in an undated photograph.

Photo: Reuters

The ITRI intends to build the plant in an industrial park to facilitate its eventual transfer to a private company. Funding would need to be budgeted by the National Science and Technology Council, while commercial arrangements, including possible government price guarantees for investors, remain under discussion, Chang said.

Taiwan’s demand for rare earths is relatively small, but the materials are indispensable, he said, adding that the Ministry of Economic Affairs hopes to develop a domestic supply chain and expand production capacity to address concerns about export restrictions.

China’s controls have highlighted risks extending beyond the supply of raw materials to components used in industrial equipment.

Reuters on Thursday reported that Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) was exploring alternatives to rare earth components in factory equipment to reduce the risk of disruptions at its advanced chip plants.

TSMC did not comment.

Rare earth magnets are used in motors that move parts in industrial machinery, including equipment in highly automated semiconductor factories, Reuters said.

Supply restrictions could affect manufacturers even when rare earths are not incorporated directly into their finished products.

The ITRI already operates an experimental rare earth production line, but its annual output is only about 5 tonnes, Chang said.

The proposed plant’s target would represent a 100-fold increase.

Equipment at ITRI’s headquarters in Hsinchu County handles rare earth separation and conversion into metals, while some equipment for making high-end magnets is at its Southern Region Campus in Tainan, Chang said.

Rare earth processing is technically challenging, as different elements have very similar properties, making them difficult to separate, he said.

Developing and fine-tuning the separation process can involve hundreds or even thousands of stages and requires substantial experience, Chang said.

The institute aims to refine its production processes by the end of 2030 as it works toward the annual output target. Alongside the technical work, further discussions will be needed on how to provide prospective private investors with sufficient assurances to participate, he said.