context: Beijing has faced a semiconductor ban since October 2022, when Nvidia and others were barred from selling top AI chips to the PRC. As rare earths are a key material for chip manufacturing, by consolidating control over the rare earth supply chain through central SOEs, Beijing rolled out rare earth management measures and regulations to enhance traceability and combat smuggling, preparing to build chokepoints. The aim is to force the US and EU to reopen their semiconductor supply chains to the PRC.
A 9 October 2025 notice from the Ministry of Commerce says rare earth exports destined for R&D or production of logic chips of 14‑nanometre or below, DRAM with half‑pitch no more than 18 nanometres, NAND of 256 layers or more, related tools and materials, or AI with likely military use, will face case‑by‑case approval, reports Caixin. Markets fell on trade risk, with US chip stocks down.
The policy also covers AI R&D with potential military uses and takes effect after expected PRC–US trade talks.
ASML’s EUV light source needs at least two rare earth compounds, and stacked memory uses rare earth compounds as inter‑layer insulators.
The move targets sub‑14‑nanometre logic and 256‑layer‑plus memory vital for AI, and the potential impact reaches ASML, Applied Materials, Lam, KLA, Samsung, SK Hynix and Micron says Hui He 何辉 Canalys semiconductor research director.
Case‑by‑case reach could echo US long‑arm rules, possibly affecting supply to firms whose end clients are US firms, He predicts. Near‑term effects may be limited by talks timing and stockpiles. Risks are medium to long-term. Memory makers may lift prices in the current up‑cycle, adds He.
PRC chip firms have grown used to US curbs. Being placed on the US Entity List is seen by some as a back‑handed badge of technical strength, notes He.