China’s export controls on rare earths could start squeezing datacenter hardware, with shipments of key materials already down sharply and Beijing due to review tougher limits in November, IEEE Spectrum warns.
The IEEE’s flagship publication flags two elements used across IT equipment: yttrium and erbium. Yttrium exports are down about 75 percent this year versus 2025. The element goes into white LEDs, displays, microwave filters, solid-state lasers and the ceramic capacitors found in almost all electronics, while erbium is used in the optical amplifiers that boost signals on fiber links.
China mines 90 percent of the world’s yttrium and processes nearly all of it, and it is effectively the sole source of erbium oxide. The IEA ranks rare earth supply among the least diversified critical minerals, with China at roughly 60 percent of magnet-material mining and 91 percent of separation and refining.
Restrictions began in April 2025 as retaliation for US tariffs. A second wave covering five new elements, including erbium, was suspended last November for 12 months after trade talks. Beijing now decides this fall whether to reimpose or extend those measures, with a Trump-Xi summit next month looming over the call.
Washington has responded with a $750M DoD investment in a Brazil magnet-materials site, $500M for seven critical-mineral projects and the $10B Project Vault stockpile, though none will change supply math quickly.
