Rare Earth Metal Pricing Skyrockets, May Result in Higher Electronics Pricing

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Rare Earth Metal Pricing Skyrockets, May Result in Higher Electronics Pricing

The semiconductor industry is one of the most complex ventures on the planet, with a supply chain relying heavily on natural resources. Nikkei reports that we are at an inflection point for the semiconductor industry – mostly due to its most basic prime matter, rare earth metals (such as copper, lithium, or tin), which are used as elements for the manufacturing of semiconductors, having seen tremendous price increases in the last year. An interplay between COVID-19-weakened supply chains, soaring demand, and political tensions between the US and China are being pointed as major forces behind the increases.

A look at the yearly price action for some such rare-earth metals showcases just how much more expensive any sort of manufacturing that uses them has become in the past year. The fact that lithium dioxide has increased around 150% YoY can be identified in the increasing popularity of electric cars. However, lithium isn’t alone in its upwards price run; copper (one of the most common conductors) has seen price increases to the tune of 37%; aluminium, which enables lightweight metals and is commonly found on computing’s cases, has increased by 55%; and tin has increased 82%. Even relatively niche rare earth metals such as neodymium (commonly found in audio drivers and related electronics) and praseodymium (used as an alloying agent for magnesium in aircraft engines and other applications), have increased by almost 74 percent YoY. Several other rare-earth metals have also increased in pricing.

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