Experts Comment: Is The Technology Industry Ready To Rethink Its Rare Earth Dependence?

TSMC has been asking its equipment suppliers about using motors that don’t rely on rare earths in its chip factories. According to Reuters, which reported the discussions on 22 October, the company has surveyed suppliers about using rare-earth-free motors in factory automation equipment amid concerns that Chinese export controls could disrupt its operations.

The concern isn’t limited to semiconductor manufacturers. Rare earths are used across everything from electric motors and robotics to consumer electronics, making them an important part of modern technology supply chains. According to the International Energy Agency (IEA), China accounted for 91 per cent of global refined rare earth output and 94 per cent of permanent magnet production in 2024. Manufacturers are beginning to look at how much they rely on these materials and what alternatives might be available.

 

Rare Earths Are Hiding In More Places Than You’d Think

 

Rare earths aren’t necessarily visible in the finished products people use every day, but their role extends well beyond the components inside them. They’re used in the machinery and specialist materials involved in manufacturing, including semiconductor production.

Sriram Nithin, Senior Product Development Engineer, explains just how widespread their use is in the semiconductor industry.

“While rare earths are not as obvious in semiconductor manufacturing as they are in EVs, they are found throughout the process equipment; wafer handling robots, vacuum pumps, lithography stages and motors as well as polishing compounds and speciality materials.”

The demand for these materials extends into other areas of hardware technology too. David Orozco Cosio, Director of Product at Peltier Pro, expects the need for rare earths to grow as battery technology develops and semiconductor production continues. Drawing on more than a decade of experience in robotics and hardware, he points to the supply chain difficulties involved in producing physical technology, as well as the prospect of materials becoming harder to source.

 

 

Can Engineers Design Around Rare Earths?

 

Reducing reliance on rare earths doesn’t necessarily mean finding a completely new material for every application. Some products could achieve the same results with smaller quantities, while others may be able to use alternative components without compromising performance.

Pete Wood, Director of DesignSpark, says engineers should consider these possibilities much earlier in product development. Alternatives, material reduction and designing for recovery and recycling should all be part of the process, rather than considerations left until a product is already established.

“It is realistic for the technology industry to reduce its reliance on rare-earth materials, but much harder to eliminate them completely without trade-offs in performance, efficiency, size or cost.”

New materials could offer another route. Dr. Andy MacInnes, Chief Development Officer at Paragraf, points to Graphene Hall sensors as one example of technology that could help detect magnetic signals when lower-strength rare-earth-free magnets are used.

“By way of example, Graphene Hall sensors can display much higher sensitivities to magnetic fields and thus present an opportunity to readily compensate for signal detection when using lower strength rare earth-free magnets.”

 

Mining What Has Already Been Mined

 

Not every solution has to involve finding or developing a replacement. Recovering rare earths from products and industrial processes could give manufacturers access to materials that have already been extracted and processed.

Shammi Thakur, Research Director at Vyansa Intelligence, believes recycling and urban mining could make a meaningful contribution to diversifying supply. He points to recovering materials from electronic waste and retired EV batteries, alongside research into reducing rare earth content in motors and magnets and investment in refining capacity outside existing production hubs. He believes meaningful diversification is achievable within this decade, although building a resilient supply chain will take considerably longer.

Industrial wastewater is another potential source of recoverable materials. Marco Bersani, CEO and Co-founder of Circular Materials, highlights wastewater from electronics manufacturing, electroplating, metal finishing and battery recycling. He explains that these processes can leave dissolved metals in water that is often discharged or treated, with the remaining material sometimes ending up as hazardous sludge.

As Bersani puts it, “The industry pays for that metal when it buys it, pays again to dispose of it, and pays a third time in water treatment downstream.”

His company uses Supercritical Water Precipitation (SWaP™) to recover metals from industrial wastewater and return them to supply chains. Bersani argues that manufacturers could make better use of materials already present at their own facilities, rather than relying entirely on newly sourced supplies.

 

Why Swapping Them Out Takes Years

 

Finding an alternative is one thing. Getting it approved and integrated into an established manufacturing process is another. In semiconductor production, even a relatively small equipment change can affect precision, yield and reliability, meaning replacements need extensive testing before they can be introduced.

Nithin believes some applications could move towards ferrite-based motors or rare-earth-free actuators, particularly where precision isn’t as critical. He also identifies changes to manufacturing chemistry and the recovery of rare earths from spent slurries and end-of-life tooling as possible ways to reduce reliance. However, equipment changes in semiconductor factories still need to go through lengthy qualification processes.

“However, anything that changes a tool in a fab has to be qualified to ensure it has no impact on yield and reliability which takes many years to do.”

Material alternatives face their own commercial hurdles. Dr. MacInnes says better materials must be manufactured consistently, at scale and at commercially viable costs before they can be used in mass-produced electronic devices. Thakur estimates that building a resilient alternative supply chain, from extraction and refining through to manufacturing, typically takes seven to ten years.

 

Reducing Demand Before It Becomes A Problem

 

Building new sources of supply and improving recycling are important, but manufacturers could reduce their exposure by using less rare earth material in the first place.

Dr. Jarek Rzepecki, CEO of Monumo, argues that product design offers an opportunity to tackle demand directly. Rather than focusing only on where materials come from, he believes engineers should look at how much goes into each product.

“Demand is the part we can change now – how much rare earth material goes into a product design in the first place.”

At Monumo, Rzepecki says the company uses Engineering AI to design electric motors and has already reduced the rare earth magnet content of multiple designs by 20 per cent or more, without losing performance. He says these reductions have been achieved on existing production lines and within a single product cycle. With electric motors used in everything from cars to robotics, reducing the material required in each design could add up across a wide range of applications.

Cosio raises a different consideration; how long technology is designed to last. He argues that the industry should move away from short-lived products and towards hardware that doesn’t need replacing as frequently. “Really, I think we need a bigger shift in mindset: away from technology that’s so short-lived, and toward technology that’s built to last.”

 

Reducing Dependence Will Take More Than One Solution

 

The technology industry isn’t likely to stop using rare earths altogether, particularly in applications where their performance is difficult to match. But manufacturers don’t necessarily need to eliminate them completely to become less exposed to supply disruptions.

There are several ways to make progress, from designing products that require fewer materials to recovering metals from existing waste and investing in alternative supply chains. Some approaches could reduce demand in the near term, while others require years of research, investment and testing. Together, they offer manufacturers more ways to manage their reliance on materials that have become difficult to source independently of a concentrated global supply chain.

 

Our Experts:

 

• Sriram Nithin: Senior Product Development Engineer
• David Orozco Cosio: Director of Product at Peltier Pro
• Pete Wood: Director of DesignSpark
• Shammi Thakur: Research Director at Vyansa Intelligence
• Dr. Jarek Rzepecki: CEO of Monumo
• Dr. Andy MacInnes: Chief Development Officer at Paragraf
• Marco Bersani: CEO and Co-founder of Circular Materials

 

 

Sriram Nithin, Senior Product Development Engineer

 

 

“While rare earths are not as obvious in semiconductor manufacturing as they are in EVs, they are found throughout the process equipment; wafer handling robots, vacuum pumps, lithography stages and motors as well as polishing compounds and speciality materials.”

“It is possible to reduce reliance but this will be done through incremental changes. Equipment manufacturers can source alternate motors – based on ferrite or rare earth free actuators – for processes where precision is not too critical.”

“The chemistry can also be altered and recycling of rare earths from spent slurries and end of life tooling is becoming an economic option.”

“However, anything that changes a tool in a fab has to be qualified to ensure it has no impact on yield and reliability which takes many years to do.”

“The semiconductor industry will likely reduce their reliance but they will still have rare earths in highest precision applications.”

 

David Orozco Cosio, Director of Product at Peltier Pro

 

 

“I’ve been working in robotics and hardware technology for over 10 years, mostly in the IoT space.”

“I’ve taken products from zero to one and from one to many, and I’ve dealt firsthand with the supply chain complexities of actually producing hardware.”

“As we move further into battery technology and keep producing semiconductors, I expect we’re going to continue needing more rare earth materials, and those materials are only going to get harder to source.”

“There are some possibilities, especially in the battery world, that more sustainable materials will come along, and if materials science improves, we could offset some of that demand.”

“But right now, none of that is widely on the market. If and when it gets there, we’ll see that shift.”

“Really, I think we need a bigger shift in mindset: away from technology that’s so short-lived, and toward technology that’s built to last.”

 

Pete Wood, Director of DesignSpark

 

 

“It is realistic for the technology industry to reduce its reliance on rare-earth materials, but much harder to eliminate them completely without trade-offs in performance, efficiency, size or cost.”

“Design engineers can play an important role by considering alternatives earlier in product development, whether through alternative materials or technologies, reducing the amount of rare-earth material required, designing for recovery and recycling, or avoiding dependence on a single component or supplier.”

“Ultimately, material and supply-chain resilience needs to become another engineering design consideration, alongside cost and performance, with engineers asking whether the same requirement can be achieved using fewer critical materials, alternative technologies or a more resilient supply chain.”

 

Shammi Thakur, Research Director at Vyansa Intelligence

 

 

“Complete independence from rare earth materials is not a realistic goal for the technology industry in the near term, but meaningful diversification is achievable within this decade.”

“The real vulnerability lies less in the materials themselves and more in how concentrated their processing and refining capacity is in a handful of countries.”

“We are already seeing credible movement on three fronts: recycling and urban mining to recover rare earths from e-waste and retired EV batteries, substitution research aimed at reducing rare earth content in motor and magnet designs, and reshoring of refining capacity through new investments outside traditional hubs.”

“None of this happens overnight. Building a resilient alternative supply chain, from extraction to refining to manufacturing, typically takes seven to ten years.”

“Companies that treat this as a long-term structural priority rather than a reactive response to export restrictions will be the ones best positioned when the next disruption hits.”

 

Dr. Jarek Rzepecki, CEO of Monumo

 

 

“Yes, and the quickest way to get there is to focus on demand.”

“Most of the rare-earths debate is about supply – new mines, processing outside China, stockpiles, etc. That matters, of course, but it is a long-term fix – perhaps even decades away.”

“China still accounts for around 90% of rare earth processing and magnet production, and its export controls have shown how quickly that concentration becomes a problem for carmakers and electronics firms.”

“Demand is the part we can change now – how much rare earth material goes into a product design in the first place.For example, most electric motors rely on permanent magnets made from rare earths.”

“With Engineering AI, we can revolutionise the design of complex systems, evaluating millions of designs against the real constraints – torque, heat, cost, materials, and manufacturability – and find options a traditional engineering team with standard tools wouldn’t be able to uncover.”

“At Monumo, we design electric motors with Engineering AI, and we have already reduced the rare earth magnet content of multiple designs by 20 per cent or more with no loss of performance, on existing production lines and within a single product cycle.”

“Electric motors are in almost everything that moves, from today’s cars to tomorrow’s robots, so a 20% cut adds up quickly, without a single new mine or factory.”

 

Dr. Andy MacInnes, Chief Development Officer at Paragraf

 

 

“Reducing reliance on rare earths is somewhat achievable, and new materials should be central to that effort. The opportunity is to rethink how technology works and which materials it needs.”

“By way of example, Graphene Hall sensors can display much higher sensitivities to magnetic fields and thus present an opportunity to readily compensate for signal detection when using lower strength rare earth-free magnets.”

“But developing better materials is only part of the challenge. We must manufacture them consistently, at scale and at commercially viable costs. That is the challenge Paragraf is tackling. We’re at the cutting edge of material research with an industrial focus, developing manufacturing processes alongside the technology so that advances can move from laboratory research into mass-produced electronic devices.”

 

Marco Bersani, CEO and Co-founder of Circular Materials

 

 

“Tech will never be free of its dependence on critical metals, but it can be far less exposed than it is today. Designs that use fewer rare earths, and better recycling of magnets and electronics, will help.”

“But one of the most overlooked sources is the wastewater from electronics manufacturing, electroplating, metal finishing and battery recycling. It carries dissolved metals that have already been mined, refined and shipped across the world, yet most of it is diluted and discharged, or treated only to meet regulation and left as hazardous sludge.”

“The industry pays for that metal when it buys it, pays again to dispose of it, and pays a third time in water treatment downstream.”

“Our Supercritical Water Precipitation (SWaP™) process recovers these metals from the water and puts them back into supply chains.”

“That supply is already inside manufacturers’ sites, out of reach of export restrictions.”

“Industrial wastewater is treated as a feedstock, not a cost.”