• Taiwan relies on Europe, the U.S., and Japan for most rare earth materials.
• China expanded rare earth export controls, adding five new elements.
• The impact on Taiwan's semiconductor sector will be closely monitored.
• Taiwan's chip industry sources critical materials primarily from outside China.
• China defends its measures citing military application concerns.

Taiwan's economy ministry confirmed that most rare earth materials utilized in the island's semiconductor industry are sourced from Europe, the United States, and Japan. The ministry stated that the full impact of China's latest export controls, which include five new elements and increased scrutiny on chip-related applications, is still being evaluated, according to Reuters and Channel News Asia.

Despite concerns about potential global supply chain disruptions stemming from China's strategic tightening, Taiwan's ministry reassured that the rare earths impacted by the ban are not essential for semiconductor manufacturing. It emphasized that the local industry will continue to monitor changes in material costs and supply chain adjustments closely, according to India Times.

Additionally, the ministry acknowledged that while the semiconductor sector may not face immediate challenges, other industries reliant on rare earths, such as electric vehicles and drones, might experience influence from these restrictions. China defended the expedient curbs on the grounds of national security and military application concerns, highlighting the geopolitical complexities involved, as reported by Reuters, Channel News Asia, and India Times.