Rare Earths & Semiconductors

Table Of Content

What are Rare Earths?
Why do they matter?
What are they used for?
Excourse: Permanent Magnets
What’s the REE journey?
Where can Rare Earths be found?
What are Sem ic onductors?
How do Rare Earths and Semiconductors go together?
What’s the current problem with both supply chains?
Which industries are affected?
Worth watching

What are Rare Earths?

Rare-Earth elements (REE) are a group of 17 metallic elements in the periodic table, including the 15 lanthanides plus scandium and yttrium.

Despite the name, rare earths aren’t actually rare—they’re fairly common in the Earth’s crust but are difficult and costly to extract and refine because they’re often mixed together. ¹

The first rare elements where discovered in 1787 in Ytterby (Sweden), with four out of seventeen having their names derive from that single location.

REEs are (chemically) heavier than iron, which means they are only produced during supernovas (explosion of a star). Their occurrences on earth are dating back to when our planet originally emerged.

Why do they matter?

They have special magnetic, luminescent, and electrochemical properties.

What are they used for?

Strong permanent magnets (wind turbines, electric vehicles, headphones, etc.)
Phosphors in LED lights and TV screens
Catalysts in oil refining
Polishing materials for glass and electronics
All of the above (and more) for both consumer and military devices

Rare earths, their classifciation and usage ²

Name	Application examples	Classification
Scandium	Aerospace components, metal-halide lamps, tracing in oil refineries	LREE (light)
Yttrium	TVs, jet engines, gas turbines, cancer treatments, lenses, batteries	LREE (light)
Lanthanum	Hydrogen storages, batteries, camera lenses, oil refineries	LREE (light)
Cerium	Self-cleaning ovens, turbine blades, oil refineries	LREE (light)
Praseodymium	Magnets, lasers, welding goggles, firesteel products	LREE (light)
Neodymium	Magnets, lasers, ceramic capacitors, electric vehicles (motors)	LREE (light)
Promethium	Nuclear batteries, luminous paint	LREE (light)
Samarium	Magnets, lasers, nuclear reactors	HREE (heavy)
Europium	Lasers, lamps, medicine	HREE (heavy)
Gadolinium	Lasers, X-ray tubes, superconductors, oxygen detectors, medicine	HREE (heavy)
Terbium	Magnets, lasers, lamps, sonar systems, fuel cells	HREE (heavy)
Dysprosium	Magnets, lasers, HDDs	HREE (heavy)
Holmium	Magnets, lasers, spectrophotometers	HREE (heavy)
Erbium	Lasers, fiber optics	HREE (heavy)
Thulium	X-ray machines, lamps, lasers	HREE (heavy)
Ytterbium	Lasers, stainless steel, nuclear medicine, earthquake monitoring	HREE (heavy)
Lutetium	LED bulbs, refineries, PET scanners	HREE (heavy)

Excourse: Permanent Magnets

Permanent magnets are metals that are magnetic on their own, as opposed to Electro Magnets which need electricity to power their magneticism ³.

They are used in all kinds of tech we use in our every day lifes (speakers, smartphones, microwave-ovens, etc.) but they are also needed for clean energy components (wind mills, electric vehicles, etc). In 2023 about $38B worth of permanent magnets has been produced globally ⁴.

Permanent Magnets aren’t just another component that could be left out of the equasion, they are building the very core of modern electronic motors by making them essentialy spin. No permanent magnets = no movement.

What’s the REE journey?

Rare Earth Elements are rarely concentrated in rare-earth minerals but rather dispersed. On top of that, they are often found together and are chemically very similar to each other. That makes mining and extracting them a very difficult operation.

Exploration & Mining
- Locating REE-baring minerals
- open-pit mining ore
Concentration
- crushing ore to powder
- separating minerals from rocks
Chemical processing / separation
- Dissolve REEs from ore with strong acids
- Seperate them from each other by using extraction, io-exchange, precipation
Refining into Metals & Alloys
- Via electrolysis and metallothermic reduction
- Several metals are alloyed with others to create usable materials
Use materials in Component Manufacturing
- Permanent magnets
- LEDs, displays
- Camera lenses
- etc

Rock in the ground
Mining
Concentration
Chemical separation
Pure REE oxides
Metals & alloys
Electronic components
Finished device

In short

Mining
Processing
Refining

The REE journey leaves pretty hazardous (partially atomic) waste that needs to be treated VERY carefully.

Where can Rare Earths be found?

The geological distribution of REEs ⁵

Top reserves (88,3M mt)	Top production (392,000 mt)
China: 44 million metric tons	China: 270,000 metric tons (68,7 %)
Brazil: 21 million metric tons	USA: 45,000 metric tons (11,5 %)
India: 6.9 million metric tons	Myanmar: 31,000 metric tons (7,9 %)
Australia: 5.7 million metric tons	Australia: 13,000 metric ton (3,3 %)
Russia: 3.8 million metric tons	Nigeria: 13,000 metric tons (3,3 %)
Vietnam: 3.5 million metric tons	Thailand: 13,000 metric tons (3,3 %)
USA: 1.9 million metric tons	India: 2,900 metric tons (0,7 %)
Greenland: 1.5 million metric tons	Russia: 2,500 metric tons (0,6 %)
	Madagascar: 2,000 metric tons (0,5 %)
	Vietnam: 300 metric tons (0,07 %)

What are Semiconductors?

Semiconductors are materials made of different elments, predominately silicon and germanium. They can conduct electricity way less than a full conductor but much better than an insulator, which makes them perfect for controlling conductivity as needed. The procedure where the crystal structure of the original material gets purposfully impured to achieve that control is called “doping”.

The production of silicon Semiconductors involves growing silicon into a crystal like structure called an “ingot”, which then gets sliced into thin layers called “Wafers”.

The industry started in the 1970s. Taiwan currently holds the largest part of the global Semiconductor industry (~ 20%). In some sectors (foundry operations) up to 50%. They are the leading manufacturer with a complete industry supply chain (OEM design, wafer manufacturing, packaging, etc.)

Semiconductors are used to build Semiconductor devices (transistors, diodes, photocells, etc). These devices then find application in consumer electronics, predominately in the design of

Microprocessors (Computers, GPUs, AI, etc.)
Storages (SDD, RAm, Flash, Cache)
Smartphones & Tablets
TVS & Gaming Consoles
Networking devices (routers etc)
Robotics
IoT Devices
Cameras
Electronic vehicles
etc

How do Rare Earths and Semiconductors go together?

Even though rare earths and semiconductors are different things, they intersect in technology supply chains.

Rare Earths are used in specialized semiconductor processes and components:

Doping materials: Elements like yttrium and lanthanum are used in semiconductor fabrication.
Photolithography equipment (used to etch microchips) can use rare earth lenses and coatings.
Polishing wafers: Rare earth oxides (like cerium oxide) are used for polishing silicon wafers.

Examples

Smartphones: The processor is made from semiconductors, but the speakers, vibration motor, and screen depend on rare earths.
EVs & renewable energy: Semiconductors control power systems, while rare earth magnets drive the motors.

You could say that Semiconductors are the brains of modern tech, while Rare Earths are the special ingredients that make the rest of the system work.

What’s the current problem with both supply chains?

Both are critical technologies for modern economies.
Supply chains are currently concentrated:

Rare earths → dominated by China (mining 70%, processing 87%, refining 90% of world supply) ⁶.
Semiconductors → dominated by Taiwan (TSMC), South Korea (Samsung), and the U.S. for design.

The US has been the number one producer of Rare Earths until the 1980s ⁷, when China took over and kept prices so low that international competition was effectively impossible ⁸. The US is importing the vast majority of necessary Rare Earths from China ever since. When it comes to permanent magnets, China is producing a whopping 94% of the world‘s supply ⁹. Companies trying to get an export license are also asked what the rare earths will be used for and exactly how the process works, giving Beijing additional leverage over foreign countries by collecting individual business secrets ¹⁰.

The semiconductor supply to the US by Taiwan is endangered due to Taiwaan’s increasing geopolitical tension with China.

Both situations are giving China a strong leverage in trade agreements with the US ¹¹. To counter that, the current US adminsitration is prioritizing domestic mining and processing of rare earth minerals from 2025 onwards, while possibly placing additional tariffs on imports. Their goal is to become less dependend on China for these important materials.

What’s more

“Global demand for rare earth permanent magnets is expected to more than double by 2035” – CNBC ¹²

Which industries are affected?

Rare earth shortage → Hits energy, mobility, and defense industries the hardest (EVs, renewables, military tech = endangering US defense).

Semiconductor shortage → Hits information processing & connectivity industries the hardest (cars, electronics, data, telecom)

Industry/ Technology	Semiconductor shortage	Rare Earth Shortage
Artificial Intelligence (AI: training & inference)	Huge impact → GPUs, TPUs, CPUs, memory are all semiconductors	Minor impact → some indirect effects via servers & cooling systems
Automotive (cars, EVs, ADAS)	Huge impact → cars need hundreds of chips for safety, sensors, infotainment, EV batteries	Huge impact → EV motors use neodymium magnets, batteries need lanthanum & cerium
Consumer Electronics (phones, laptops, consoles)	Huge impact → processors, memory, sensors, displays	Medium → rare earths in screens, speakers, vibration motors
Telecommunications (5G, networking)	Huge impact → chips for base stations, routers, satellites	Medium → some magnets & lasers require rare earths
Cloud & Data Centers (AI, servers, storage)	Huge impact → CPUs, GPUs, memory chips	Low → not strongly dependent on rare earths
Green Energy (solar, wind, batteries)	Medium → chips for power conversion & grid control	Huge impact → wind turbines & EV batteries need rare earths
Defense & Aerospace (jets, missiles, satellites)	Huge impact → advanced chips for navigation, communication, targeting	Huge impact → rare earth magnets & sensors in missiles, radars, jet engines
Healthcare (MRI, CT, ventilators, wearables)	Huge impact → medical electronics rely on chips	Medium → imaging machines use some rare earths
Lighting & Displays (LEDs, TVs, lasers)	Medium → display drivers & processors	Huge impact → phosphors (europium, terbium, yttrium) essential for LEDs & screens