My new direction on sorcing stocks
If Trump has to go near china to beg them for some rare earth material, and Rare Earth material and equipment Shares of Chinese company like China Northern Rare Earth Group and Shenghe Resources surged by 8.3 per cent and 6.3 per cent there is a reason.
China produces over 90 per cent of the world’s processed rare earths and rare earth magnets. The 17 rare earth elements are vital materials in products ranging from electric vehicles to aircraft engines and military radars.
Beijing is also widening its export controls to foreign companies that use Chinese rare earth equipment or materials, the Ministry of Commerce said in a statement, mimicking US rules that restrict the export of semiconductor-related products.
Restrictions on exporting the technology to produce rare earth magnets will also be expanded to more types of magnets, and China will limit certain components and assemblies that contain restricted magnets, its ministry added.
China is the world leader in rare earth technology, and equipment to recycle rare earths will now require a licence to export, adding it to the long list of restricted processing technology.
The new extraterritorial rules will start on December 1, while the remainder commence immediately.
Chips and defence
The Ministry of Commerce’s announcement clarified for the first time some of the targets of China’s restrictions. Overseas defence users will not be granted licences, the ministry said, while applications related to advanced semiconductors will be approved only on a case-by-case basis.
The new rules apply to 14nm chips or more advanced chips, memory chips with 256 layers or more, and equipment used in the production of such chips, as well as to related research and development. These advanced chips are used in a wide range of products from smartphones to artificial intelligence chipsets that require powerful computing performance.
The rules will also apply to research and development of artificial intelligence with potential military applications.
South Korea, home to major memory chipmakers Samsung Electronics and SK Hynix, is assessing the details of the new restrictions and will continue discussions with China to minimise their impact, its Industry Ministry said in a statement to Reuters.
Samsung declined to comment. SK Hynix and Taiwan’s TSMC did not immediately respond to questions.
Shares in TSMC finished up 1.8 per cent on Oct 9, as the company reported forecast-beating third-quarter revenue. South Korea’s financial markets are closed on Oct 9 for a public holiday.
China’s rare earth shipments have been growing steadily over the past few months as Beijing grants more export licences, although some users still complain they are struggling to get them.
In a nod to concerns about access, the Ministry of Commerce said the scope of items in its latest round of restrictions was limited and “a variety of licensing facilitation measures will be adopted”. REUTERS... Show More
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