U.S. rare earth supply worsens again! Some aerospace and chip production forced to limit output; yttrium price skyrockets 69-fold in one year!

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The rare earth shortage faced by the US aerospace and semiconductor supply chains continues to deteriorate. Two North American aerospace coating companies have been forced to temporarily suspend production, and critical raw material inventories for some chip manufacturers are also running dangerously low.

According to Reuters, the shortage mainly involves two rare earth elements: yttrium and scandium. Since the issue of yttrium shortage was first reported by self-media last November, the price of yttrium has risen by 60% in total, and is currently about 69 times higher than a year ago. Executives from several North American coating companies stated that rationing management of yttrium has begun, with priority given to major customers, while some small and overseas customers have already been refused service.

In the semiconductor sector, Dylan Patel, founder and CEO of research institute SemiAnalysis, told Reuters that US chip manufacturers’ scandium inventories are rapidly being depleted, putting next-generation 5G chip production at risk. He pointed out that the current domestic production of scandium in the US is zero, and existing stock is likely only enough for months rather than years.

A US government official confirmed that some US manufacturers are currently facing a rare earth "shortage". The White House stated that the Trump administration is committed to ensuring US companies’ access to key minerals and, if necessary, to developing alternative supply chains.

Yttrium price surges, aerospace coating companies forced to limit production

Yttrium is a core raw material for manufacturing high-temperature thermal barrier coatings, which protect aircraft engines and turbines from melting under extreme heat. Engines lacking regular coating maintenance cannot operate normally.

According to Reuters, executives from two North American companies that buy yttrium for coating production revealed that supply shortages have forced them to temporarily halt production; one company has begun refusing orders from small and overseas clients to prioritize saving inventory for major customers, including certain engine manufacturers. Another company in the supply chain has recently run out of yttrium inventory and has stopped selling products containing yttrium oxide.

Although the current yttrium shortage has not directly affected complete jet engine production, Kevin Michaels, managing director of aerospace supply chain consulting firm AeroDynamic Advisory, pointed out that the industry needs to be highly vigilant. "This is a signal worth close attention," he said. He also noted that engine manufacturers are coping with pressure to meet parts demand driven by production increases at Boeing and Airbus.

Semiconductor supply crisis, 5G chips face supply chain disruption risk

Scandium is another key rare earth element with restricted supply, widely used in fuel cells, specialty aluminum alloys, and advanced chip packaging processes. Global scandium annual production is only a few dozen tons and is extremely concentrated.

Dylan Patel stated that all major US semiconductor manufacturers rely on scandium to produce chip components found in "almost every 5G smartphone and base station."

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