# Taiwan Plans 500-Ton Rare Earth Plant to Cut China Reliance *The state-backed facility targets half of domestic demand by 2030, expanding an experimental pilot line a hundredfold as chipmakers brace for upstream export restrictions.* **Published:** October 25, 2026 **By:** Mina Okoro **Section:** Energy & Critical Minerals — Cross-border **Format:** Breaking **Confidence:** medium **Source:** https://eastasiabrief.com/energy-minerals/taiwan-plans-500-ton-rare-earth-plant-cut-china-917 **Publisher:** East Asia Brief (https://eastasiabrief.com/) --- ## What to know - ITRI targets 500 tons of rare earth refining per year by late 2030 to cover 50% of domestic demand - TSMC surveys tool vendors on motor exposure as China supplies over 90% of Taiwan's imports - Refinery construction concludes by late 2028 before commercial transfer, though total budget remains unconfirmed ![Technicians operate control panels alongside processing equipment as Taiwan moves to establish domestic rare earth refining facilities. (AI-generated image)](https://eastasiabrief.com/media/2026-10-25-fcbb2779a53b.webp) *Technicians operate control panels alongside processing equipment as Taiwan moves to establish domestic rare earth refining facilities. (AI-generated image)* Taiwan's state-backed Industrial Technology Research Institute announced plans Oct. 24 to build a demonstration plant producing 500 metric tons of refined rare earths annually by late 2030. The facility aims to supply 50% of domestic industrial demand once fully operational, Chang Pei-zen, president of the institute, said in an interview with the Central News Agency. The 500-ton annual output target represents a 100-fold expansion over the institute's current experimental line in Hsinchu County, which produces about five metric tons of material each year. Taiwan possesses no active mineral deposits and imports roughly 3,000 metric tons of rare earth elements annually, according to estimates by the Ministry of Economic Affairs. China accounts for more than 90% of those imported volumes, leaving Taiwanese foundries and precision component makers directly exposed to Chinese export control measures. China tightened export licensing on critical minerals and processing equipment over the past three years, raising concern that Beijing could restrict permanent magnet metals next. The export controls highlighted structural vulnerabilities across Taiwan's hardware manufacturing base, where electronics and information technology account for nearly 70% of total export receipts. Taiwan Semiconductor Manufacturing Co surveyed factory equipment suppliers in mid-October regarding rare-earth-free motors to shield its semiconductor cleanrooms from sudden upstream supply disruptions. Rare earth magnets made from neodymium, iron and boron power the servomotors that drive automated wafer transfer cranes and precision stages in advanced fabrication fabs. Chipmakers rely on permanent-magnet motors for extreme mechanical accuracy, but replacing them with induction or ferrite alternatives requires qualification cycles that can take months or years. Beyond semiconductor cleanrooms, Taiwan's energy transition requires substantial magnet inputs, with offshore wind turbine generators consuming about 600 kilograms of rare earths each. Electric vehicle drivetrains and military unmanned aerial vehicles also require between two and five kilograms of neodymium-iron-boron magnets per motor assembly. The research institute will build the demonstration refinery inside an established industrial park to simplify the eventual commercial handover to private manufacturing firms, Chang said. The National Science and Technology Council will budget construction funding for the plant, while the economics ministry establishes commercial protections for incoming industrial partners. Economic officials are evaluating price guarantees to protect private participants from state-subsidized price volatility originating from Chinese refineries, Chang said. Private Taiwanese chemical makers previously avoided commercial rare earth separation because volatile Chinese spot prices repeatedly undermined private capital investments. China's dominant state refiners have historically expanded output during market downturns, dropping prices below the operating costs of independent Western and Asian processors. The proposed price guarantee framework aims to establish a procurement floor price, assuring private investors that the demonstration refinery can cover baseline operating margins. Equipment installed at the institute's main campus in Hsinchu County conducts chemical separation and conversion into pure metals, Chang said. Downstream fabrication machinery that presses and sinters high-grade permanent magnets operates at the institute's Southern Region Campus in Tainan, Chang said. Separating adjacent lanthanide elements requires dozens of extraction tanks and organic solvents because individual rare earth metals share nearly identical chemical properties. The industrial park site selection will determine environmental permits for managing acidic wastewater and chemical effluents generated during multi-stage solvent extraction. The demonstration plant will also process feedstock drawn from electronic waste recycling, building on a domestic collection system that captures 80% of discarded electronics. The facility formalizes an initiative announced in February, when Economy Minister Kung Ming-hsin outlined plans to build a pilot line following bilateral trade talks in Washington. American officials agreed during the sixth Economic Prosperity Partnership Dialogue to help Taipei secure access to raw mined ore from non-Chinese sources. Kung said in February that Washington expressed interest in replicating Taiwan's processing setup in partner countries once the demonstration technology proves commercially viable. Raymond Greene, director of the American Institute in Taiwan, reiterated in June that Washington and Taipei are expanding joint efforts on critical mineral processing capacity. While South Korea responded to mineral controls through state-backed stockpiling and overseas mining equity, Taiwan has prioritized domestic midstream refining and scrap recycling. Civil construction of the demonstration refinery is scheduled for completion by the end of 2028, according to the research institute's development schedule. Engineers will then spend two years optimizing solvent recycling and metal conversion lines to reach the 500-ton commercial output target by late 2030. The institute has not named the industrial park that will host the refinery, and the National Science and Technology Council has not disclosed the total capital budget. The roadmap also does not specify what share of the 500-ton capacity will produce heavy rare earths, such as dysprosium, which maintain magnet strength under high heat. The National Science and Technology Council presents its annual research allocations when the Legislative Yuan begins statutory budget committee reviews in November. ## Impact map | Event | Korea | China | Japan | Global impact | | --- | --- | --- | --- | --- | | Taiwan rare earth demonstration refinery | South Korean magnet makers monitor non-China chemical separation feedstocks | State refiners face regional alternatives to mainland NdFeB supply chains | Japanese magnet producers evaluate tolling partnerships for separated oxides | Chip tool builders test rare-earth-free motors to de-risk fab cleanroom automation | ## In this story - **Companies:** Taiwan Semiconductor Manufacturing Co - **Tickers:** 2330.TW - **Policy:** Subsidies - **Impact:** Supply Chain, Capex, Pricing ## Primary sources 1. ltn.com.tw 2. udn.com 3. taipeitimes.com 4. ocac.gov.tw 5. kita.net --- Cite as: East Asia Brief, "Taiwan Plans 500-Ton Rare Earth Plant to Cut China Reliance," October 25, 2026. https://eastasiabrief.com/energy-minerals/taiwan-plans-500-ton-rare-earth-plant-cut-china-917