The supply of rare earths in the United States has worsened again! Some aerospace and chip production has been forced to limit output, and the price of yttrium has skyrocketed 69 times in a year!

The rare earth shortage issue faced by the U.S. aerospace and semiconductor supply chain continues to worsen. Two North American aerospace coating companies have been forced to temporarily suspend production, and some chip manufacturers are facing critical shortages of key raw materials.

According to Reuters, this shortage is concentrated on two rare earth elements: yttrium and scandium. Since the issue of yttrium shortage was first reported by social media in November last year, the price of yttrium has increased by 60% cumulatively, and has skyrocketed approximately 69 times compared to a year ago. Executives from several North American coating companies have stated that they have begun to implement rationing management for yttrium, prioritizing supply for major clients, while some small and medium-sized as well as overseas clients have been denied service.

In the semiconductor field, Dylan Patel, founder and CEO of research firm SemiAnalysis, told Reuters that the scandium inventory of U.S. chip manufacturers is rapidly depleting, posing risks to the production of next-generation 5G chips. He pointed out that the current domestic production of scandium in the U.S. is zero, and the existing inventory is likely only sufficient to last for a few months rather than years.

A U.S. government official confirmed that some American manufacturers are currently facing a rare earth "shortage." The White House stated that the Trump administration is committed to ensuring that U.S. companies have access to critical minerals and to developing alternative supply chains when necessary.

Yttrium Price Soars, Aerospace Coating Companies Forced to Limit Production

Yttrium is a core raw material for manufacturing high-temperature thermal barrier coatings, which are used to protect aircraft engines and turbines from melting under extreme high temperatures. Engines that lack regular coating maintenance will be unable to function properly.

According to Reuters, executives from two North American companies that purchase yttrium for coating production revealed that the supply shortage has forced them to temporarily suspend production; one of the companies has begun to refuse small and medium-sized clients as well as overseas clients to prioritize inventory for large clients, including specific engine manufacturers. Another company in the supply chain has recently exhausted its yttrium inventory and has stopped selling products containing yttrium oxide.

Although the current yttrium shortage has not yet directly affected the overall production of jet engines, Kevin Michaels, executive director of U.S. aerospace supply chain consulting firm AeroDynamic Advisory, pointed out that the industry needs to remain highly vigilant. "This is a signal worth close attention," he said. He also noted that engine manufacturers are currently dealing with the pressure of spare parts demand arising from increased production capacity from Boeing and Airbus.

Semiconductor Supply Crisis, 5G Chips Face Supply Chain Risks

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

Dylan Patel stated that major U.S. semiconductor manufacturers rely on scandium for producing "almost every 5G smartphone and base station" chip component