Suppliers serving the United States aerospace and semiconductor industries are grappling with increasingly severe shortages of rare earth elements, a situation that has forced some companies to turn away customers. This development comes just weeks before a pivotal summit in Beijing, where US President Donald Trump is scheduled to meet Chinese President Xi Jinping. The rare earths at the heart of this crisis include yttrium and scandium, two relatively obscure but essential elements among the family of 17 rare earth metals. These materials play critical roles in defense technologies, aerospace engineering, and semiconductor manufacturing, yet their production remains overwhelmingly concentrated in China.
Although China lifted many of its export restrictions on rare earths after imposing them in April, shipments destined for the United States remain scarce. Chinese customs data reveal that despite the tentative easing of trade tensions in October, the flow of these vital materials to American companies has not significantly improved. The upcoming discussions between Trump and Xi are expected to revisit these export controls, as the availability of critical minerals remains a contentious issue in bilateral trade relations.
One of the most pressing concerns centers on yttrium, a rare earth element used primarily in high-temperature coatings that protect aerospace engines and turbines from melting under extreme heat. Without these protective coatings, engine components cannot function safely or efficiently. Since the initial reports of yttrium shortages emerged in November, prices have surged by approximately 60%, reaching levels nearly 70 times higher than those recorded a year ago. This dramatic price escalation has led some manufacturers of these coatings to ration their yttrium supplies, prioritizing larger clients and even suspending orders from smaller or overseas customers to conserve dwindling stock.
Executives from two North American companies involved in producing yttrium-based coatings have confirmed that they have had to temporarily halt production due to the scarcity of raw materials. One of these firms has also begun turning away smaller clients to ensure that key engine manufacturers continue to receive essential supplies. Additionally, a company further down the supply chain recently exhausted its yttrium oxide inventory and ceased sales of products containing the element. While these shortages have not yet caused direct disruptions in jet engine or semiconductor chip production, US manufacturers are increasingly feeling the strain of limited access to certain rare earths sourced from China.
Statistical data underline the severity of the situation: China exported just 17 tons of yttrium products to the US in the eight months following the imposition of export controls last April, compared to 333 tons during the same period the previous year. In response, the US administration has emphasized its commitment to securing access to critical minerals for American industries. Efforts include ongoing negotiations with China to ensure compliance with agreements made between the two presidents, alongside initiatives to develop alternative supply chains to reduce dependency on Chinese exports.
Industry experts highlight that although the current yttrium shortage has not yet halted engine production, it remains a significant concern. Aerospace supply chain specialist Kevin Michaels describes the situation as a clear example of China leveraging its dominance in rare earth elements to exert economic influence. Engine manufacturers are already under pressure to meet rising demand for spare parts from airlines, as well as increased production targets set by major aircraft makers such as Boeing and Airbus. Notably, leading US aerospace engine companies including GE Aerospace, Pratt & Whitney, and Honeywell have declined to comment on the issue publicly.
In addition to yttrium, scandium—a rare earth element critical to the semiconductor industry—is also in short supply. Scandium is vital for manufacturing next-generation 5G chips, which power modern smartphones and telecommunications infrastructure. With global production limited to just several tens of tons annually, scandium’s scarcity poses a significant risk to the rollout of advanced chip technologies. Dylan Patel, CEO of research firm SemiAnalysis, points out that major US semiconductor manufacturers rely heavily on scandium for components integrated into virtually every 5G device and base station.
Recent months have seen delays in the issuance of new scandium export licenses from China, prompting US chipmakers to seek assistance from the government. Some companies have attempted to source scandium from third countries, but Chinese regulations require license applicants to disclose their end-users, complicating procurement efforts. A US official suggested that the semiconductor sector might be a deliberate target of these export restrictions. Despite these challenges, the US Semiconductor Industry Association has refrained from commenting publicly.
Currently, the United States lacks domestic production of scandium and has no operational alternative suppliers outside China, leaving the industry vulnerable to supply disruptions. Experts estimate that existing stockpiles of scandium may only last for a few months, underscoring the urgency of diversifying supply chains. As the Trump administration prepares for high-level talks with Beijing, securing reliable access to these critical rare earth elements remains a top priority for sustaining the competitiveness and security of US aerospace and semiconductor sectors.
