Supplies of critical rare earth materials used by US aerospace and semiconductor companies are tightening further despite a recent easing of trade tensions between Washington and Beijing.
Industry sources say shortages of yttrium and scandium have worsened in recent weeks, affecting suppliers that serve defence, aviation and advanced chip manufacturing. These rare earth elements are produced almost entirely in China and are essential despite being used in very small quantities. Yttrium is vital for protective coatings that prevent aircraft engines and turbines from overheating, while scandium is used in advanced alloys and next-generation semiconductor components.
Executives said some North American suppliers have been forced to temporarily pause production or ration material, prioritising large customers while turning away smaller clients. Prices of yttrium have surged sharply since late last year, reflecting limited availability and continued export controls. Although Chinese authorities have allowed some exports to resume, shipments to the United States remain far below previous levels.
US government officials have acknowledged that manufacturers are now facing shortages of certain rare earths sourced from China. In the semiconductor sector, dwindling scandium supplies are raising concerns about the production of future 5G-related chips. Global scandium output is extremely limited, and the United States currently has no domestic production.
Companies have sought alternative suppliers, but licensing requirements and disclosure rules have slowed deliveries. Officials say stockpiles may last only months, not years. The situation is adding pressure to already strained aerospace and chip supply chains as demand for aircraft parts and advanced electronics continues to rise.
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