Suppliers for the US aerospace and semiconductor industry are facing an increasingly serious shortage of rare earths, even though Beijing has allowed the resumption of many export activities after imposing restrictions from April 2025.
The focus of scarcity is elements such as yttrium and scandium, two elements that are less noticed in the group of 17 rare earths but play an essential role in defense technology, aviation engines and chip manufacturing. The supply of these materials is largely dominated by China.
Chinese customs data shows that in 8 months after applying control measures, this country only exported 17 tons of yttrium products to the US, much less than 333 tons in the previous 8 months. Although the two sides reached an agreement to de-escalate tensions in October, shipments still rarely reached the US.
This issue is expected to be raised when US President Donald Trump meets with Chinese President Xi Jinping in Beijing in March.
Yttrium is especially important in the coating protecting the engine and turbine from high temperatures. Without regular coating, the engine cannot operate.
Since the US media first reflected the yttrium shortage in November, prices have increased by 60% and are about 69 times higher than 1 year ago. Some coating manufacturers have begun to allocate limited raw materials.
Leaders of 2 North American companies buying yttrium to produce coatings said they had to temporarily suspend production due to lack of supply.
One company is refusing small and overseas customers to prioritize large customers, including engine manufacturers.
Another enterprise in the supply chain ran out of raw materials and stopped selling products containing yttrium oxide.
However, according to a US official, the shortage of yttrium and scandium has not directly affected the production of jet engines or chips.
Mr. Kevin Michaels, CEO of AeroDynamic Advisory consulting company, said that this is an issue that needs to be closely monitored and is an example of China showing strength in the field of rare earths.
Engine manufacturers in the US have struggled to meet the demand for replacement components from airlines and Boeing and Airbus' plans to increase production. Engine manufacturers such as GE Aerospace, Pratt & Whitney of RTX, and Honeywell declined to comment.
In the semiconductor field, Mr. Dylan Patel, founder and CEO of the research company SemiAnalysis, said that US chip manufacturers are lacking scandium, threatening the production of new generation 5G chips.
With a global output of only a few tens of tons per year, scandium plays an important role in fuel cells, aviation aluminum alloys and advanced chip processing and packaging processes.
According to sources, US businesses are facing delays in applying for new scandium export licenses from China and have asked Washington for support.
China requires licensing units to declare end users, raising suspicions that the semiconductor industry is being targeted.
A White House official affirmed that the Trump administration is committed to ensuring strategic mineral access for US businesses, including negotiations with China and developing alternative supply chains when necessary.
Mr. Patel said that the US currently does not produce scandium domestically and has no alternative source operating outside of China, while reserves may only be enough for a few months.
