China's updated export control seem to be directed @ US EAR's De Minis Rule (for 0.1% 13 RE elements) + FDP (Chinese tech in mining, smelting, separation, processing, mfg & recycling). Annex 1 can be modified to include more elements like Ga, Ge & La. Why is it done this way?
China's emphasis here on advanced semi mfg, R&D + AI chip is a direct retaliation for something from 3 yrs ago. it also added its own BIS 50% rule for entity list firms. Would signal that it's no longer concerned about further US restrictions on SMEs & AI chips. Huge implication
As seen in this table, this entirely stops RE tech diffusion & seeks to choke off foreign RE buildout w/ control of machines, chemicals, data, IP & any Chinese tech. Overcoming this would require a full RE supply chain to be built outside of China. Would require concerted long
2 possible reasons for this move are: 1) kill off US effort in building up own RE industry like MP Materials, which relies on core Chinese equipment & material. 2) Huge negotiating leverage ahead of APEC meeting. Order 62 makes clear that all knowledge transfers are controlled
How does this actually affect semi industry. Well, some high-k materials belong to RE material (La is not in this list but is quite prominent). RE material coating & magnets are also key in PVDs, etching, lithography & other equipments. Ge could easily be added in future & SiGe
2 posts here argue for the importance of La as well as Samarium Cobalt magnets in SME RE target material is critical in production of thin film materials used in PVD/CVD where target is evaporated to deposit onto substrate, forming thin film. Can't do R&D + production w/o them
Some may wonder why HK-MG tech is needed at all. Why do we care if La is export controlled? Well, the section below explain why La is important in Finfet HK-MG & that it is used in advanced DRAM. All things you would need in your AI chip + buildout.
Some ppl would argue that since China doesn't have all the world's RE deposit or even produce all of it (just 69% of REO in 2024), then why does China even matter? Well, did you know that US/MP Materials had to ship all its RE concentrates to China for processing until recently?
MP Materials did complete light RE processing facility recently, allowing for that to LRE to be made into NdPr productions. Malaysia also has some LRE processing w/ Lynas. But can these facilities operate w/o Chinese chemicals or equipments? After all, MP had Chinese help in
China is a huge importer of RE carbonate from Malaysia (even tho Malaysia process its RE) & other RE from Myanmar & Laos bc these countries struggle to complete the full RE product cycle w/o Chinese downstream plants or equipments. Their RE industry rely on Chinese tech.
And even if you do build a RE supply chain outside of China, will it actually be competitive? China is able to produce ultra high purity (6N+) RE material thru yrs of research which are needed for top end weaponry, chips & SMEs. Would a lower purity material be good enough?
As I wrote here, RE is far more than just digging metals out of the ground. There is an entire industry & supply chain just like semi. Yet bc ppl don't understand it, they don't realize the diff bw high vs lower ender alloys & end products. https://x.com/tphuang/status/1...
This is very significant. It remains to be seen China's end goal here. Whether it is just to gain negotiation leverage or to hold back US AI industry or something else. I don't think China is bluffing, so is willing to deal w/ retaliations when they come https://x.com/tphuang/status/1...
It's very hard to build Rare Earth industry or any critical mineral industry when AI/tech & finance suck up all your electricity, talent & capital. US has to make a decision on continuing to worship tech & finance bros vs having a real economy. https://x.com/aphysicist/statu...
Another key pt here. China took several yrs to respond bc it takes time to develop the export restriction regime that America has spent decades on. How China enforce these new laws is a big Q. But Chinese RE tech is a strategic weapon now. https://x.com/ryanl_hass/statu...
@tphuang As far as I know for US export control, it includes: a) Export and re-export b) goods and technology In reality it can be a combination of a) and b). Export control is common in some industries. Basically China just followed the US export control practice.
@Enthusiasm2024 i think following us export control practice is a way of deflecting the anger from other countries that will surely come after this.
@tphuang China has obviously learned US’s tricks and improvised it better
@tphuang Do,you have full document