Weekly News Review October 12 – October 18 2026

New export figures from China, growing interest in Vietnam’s raw materials, and an analysis of hidden dependencies in the U.S. chip industry: This week’s news once again highlights just how complex the supply of critical raw materials is. Read more in our latest roundup.

RARE EARTHS: CHINA’S EXPORTS FALL WHILE VALUES RISE –

China’s rare earth exports fell in September from August, but remained above the level recorded a year earlier. Current customs data show that 4,269.8 tonnes were exported, 9.8% less than in August. Compared with September 2025, however, shipments were up 6.7%.

The year-to-date figures tell a different story: Exports totalled 43,711 tonnes in the first nine months of 2026, 9.6% below the same period last year. June 2025 had seen exceptionally high shipments. The reported value of exports, by contrast, rose sharply by 46.6%. This may reflect higher prices for certain rare earth elements and a shift in the product mix.

The monthly data released by China Customs cover all 17 rare earth elements, not only the seven particularly critical elements Beijing placed under export controls in April 2025. The authority releases a detailed breakdown by product and destination in the second half of each month.

EU AND CHINA SIGNAL TRADE PROGRESS:

Potential compromises cover hybrid vehicles and tariffs, among other issues. For rare earth exports, Beijing intends to improve an existing fast-track licensing process but has provided no details.

The EU and China have agreed on initial steps to ease their trade dispute. EU Trade Commissioner Maroš Šefčovič and China’s Commerce Minister Wang Wentao announced the outcome following their meeting in Beijing on October 8–9. Brussels had previously called for progress by October on issues including the EU’s trade deficit, market access for European companies, and China’s export controls on critical raw materials.

A key agreement aims to curb Chinese exports of hybrid and plug-in hybrid cars to ease competitive pressure on Europe’s auto industry. Over four years, shipments could be more than 50% below the volumes projected without such limits, Šefčovič said. Approval from EU heads of state and government is still pending.

China has also raised the prospect of lower tariffs on EU goods such as auto parts, olive oil, and footwear. Both sides intend to continue talks on minimum prices for Chinese battery electric cars. Such arrangements could replace the additional EU duties imposed following an anti-subsidy investigation.

Rare Earths: China Plans to Improve “Existing Fast-Track Process” for the EU:

Less detail has been provided on rare earths and products made from them, such as permanent magnets. China introduced export controls in April 2025, causing temporary supply shortages and putting European industry under pressure. According to the joint statement, Beijing intends to continue facilitating export licensing for shipments to the EU through the existing fast-track process. It had already offered an accelerated approval channel in June 2025.

The process had ensured the supplies European industry needed, Šefčovič said at the press conference. He gave no figures, however, on licenses issued or reductions in processing times. The next step, he said, was to make procedures simpler and more transparent for European companies and raw material supplies more predictable. How this would be achieved remains unclear.

For its part, the EU intends to facilitate export licensing to China for certain goods with both civilian and military uses. Both sides also want to notify each other earlier and improve transparency when companies or institutions are added to or removed from export control lists.

EU leaders will discuss the outcome at the European Council summit in Brussels on October 15–16. Further ministerial talks with China are planned for January and March 2027.

VIETNAM ATTRACTS GROWING INTERNATIONAL INTEREST:

The EU wants to deepen its raw materials cooperation with Vietnam. However, companies from China and South Korea have already set their sights on the country.

Vietnam could become an important partner for the European Union thanks to its wealth of mineral resources, as the bloc seeks to reduce its heavy dependence on China. In January, the two sides agreed to strengthen their cooperation, including in the extraction and processing of strategic raw materials (as we reported). More concrete steps could now follow, with a sense of urgency apparently driving the discussions, according to an exclusive report by Reuters.

Documents reviewed by the news agency suggest that the EU is considering supporting Vietnamese raw materials projects through loans, grants, and technical assistance. Export credit guarantees are also reportedly under discussion. The focus is likely to be on processing capacities, a stage of the value chain dominated by China for many raw materials.

Vast Potential, International Interest:

Vietnam has substantial rare earth reserves of 3.5 million tonnes, but its mine production amounted to just 150 tonnes last year, according to data from the US Geological Survey. Companies such as LS Eco Energy have already recognised the country’s potential as a location for raw materials processing. The South Korean company plans to build a production facility for samarium metal in Ho Chi Minh City, with feedstock to be supplied by Australia’s Lynas.

In 2024, another South Korean company, Trident Global Holdings, secured rights to three rare earth mines in Vietnam, which it intends to develop together with a local partner.

China, on which the EU is seeking to reduce its dependence, has also long been active in Vietnam. In 2024, the state-owned China Rare Earth Group explored potential cooperation in rare earth mining and processing.

Whether and how EU-Vietnam cooperation will take shape amid these competing interests could become clearer soon. Initial agreements could be reached during a planned visit by Vietnam’s leader To Lam to Brussels on October 22.

JAPAN TO FUND NEW US SEMICONDUCTOR PLANT:

Around $10 billion is initially set to be invested in the facility in New York state. A later expansion could raise the total to $21 billion.

Japan and the United States have agreed to build a semiconductor plant in New York state. It will be located at GlobalFoundries’ site in Malta, with the US contract chipmaker providing the technology and operating the facility. Construction is scheduled to begin before the end of 2026, while production could start in 2029.

At full capacity, the plant is expected to produce around 900,000 wafers measuring 300 millimetres in diameter each year. Wafers are discs made from semiconductor material on which numerous individual chips are manufactured.

The financing will be provided under the two countries’ Strategic Investment Initiative through Japanese public funds and guaranteed bank loans. As Japan’s Foreign Ministry said, the initial $10 billion investment could eventually rise to $21 billion if additional production facilities are added.

GlobalFoundries has named Japanese chipmaker Renesas and US technology group Apple as initial customers. Apple already has certain chips for its devices manufactured by GlobalFoundries.

At the same time, GlobalFoundries is reallocating up to $955 million from an existing US government funding commitment. The award, totalling up to $1.6 billion, was originally intended for a new facility in Malta and the expansion of existing plants. A larger share will now go to current sites, where capacity for silicon-germanium, silicon photonics and advanced chip packaging will be expanded.

UNITED STATES SEMI-CONDUCTOR INDUSTRY:

New study reveals the extent of the US semiconductor industry’s dependence on Chinese raw materials and upstream supply chains.

The semiconductor industry is a key enabler of numerous emerging technologies, from artificial intelligence to autonomous driving. However, its development depends on a reliable supply of essential raw materials and intermediate products. Significant risks remain in this area, according to a recent report (PDF) by the US Semiconductor Industry Association (SIA).

The association identifies geographical concentration of production, dependence on a limited number of suppliers, and geopolitical factors such as export controls as major sources of supply risk. Additional vulnerabilities are often hidden deep within upstream supply chains. US semiconductor manufacturers frequently source materials and equipment from companies based in Europe, Japan, or the United States. However, these suppliers may themselves depend on critical raw materials from China. A diversified supplier base therefore does not necessarily translate into diversified raw material sourcing. According to the SIA, more than three-quarters of the supplier categories examined depend on at least one particularly vulnerable upstream input.

Stockpiling Also Has Its Limits:

Efforts to establish domestic production capacities for raw materials and intermediate products are already underway in some areas. However, it can take ten years or more for new facilities to reach meaningful production levels. New materials and suppliers must then undergo qualification for use in semiconductor manufacturing, a process that can take another three to four years.

Securing supply chains over the medium term therefore requires a combination of approaches, including cooperation with partner countries, long-term offtake agreements, and strategic stockpiling. However, the SIA also highlights practical limitations to stockpiling. For example, scandium in the metallic form required by the semiconductor industry has a shelf life of just nine to 15 months. Environmental regulations also restrict the accumulation of larger inventories of certain process gases.

The association therefore recommends regulatory adjustments and additional research to extend the shelf life of critical materials.