Prices of yttrium oxide — a critical coating material used in semiconductor manufacturing — have surged nearly 1,500% this year, hitting a record high as China tightens restrictions on rare-earth exports. The spike is adding new pressure to an already fragile global chip supply chain.
According to Mining.com, the rare-earth compound was priced at less than $3.63 per pound late last year. It now trades at roughly $57.15 per pound, driven by growing supply shortages and geopolitical uncertainty.
Yttrium oxide is used across a wide range of advanced industries, including medical devices, aerospace components, ceramics, lasers, superconductors, and semiconductor processing equipment.
Mining.com attributes the sharp rise primarily to China’s strengthened controls on exports of rare-earth elements and related magnet materials — measures that took effect in April as part of Beijing’s broader push to manage strategic resources more tightly.
From 2019 to 2023, over 90% of the yttrium oxide imported into the United States came from China, leaving U.S. manufacturers highly exposed to supply disruptions.
The U.S. government is stepping up efforts to diversify its supply chain. MP Materials — backed by the Department of Defense — continues to mine yttrium-bearing ore at its Mountain Pass facility in California and is expanding its refining and processing capacity to boost domestic production.
Australia’s Lynas Rare Earths is also increasing output, using its Mount Weld mine in Malaysia to add more non-China supply to the global market.
Analysts warn that if China’s restrictions tighten further, semiconductor manufacturers could face additional cost pressures and production risks — potentially worsening stress across the global chip ecosystem.
