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Chinese embargo causes tech price increaseBy Johan Keyter 9 November 2010 | Categories: news
The Chinese embargo on rare earth elements is causing a price hike in the cost of materials needed to manufacture many high-tech items, from mobile phones to wind turbines.
According to CNET, the embargo is expected to lead to an increase in the price of high-tech items before prices stabilise in a few years time as new mines in other parts of the world become operational. China currently mines 97% of the world's supply of rare earth elements.
Robert Castellano, president of The Information Network, noted in a statement that in semiconductor manufacturing prices of ceria (ceric oxide) in certain applications have increased more than 1000% over the past year.
Rare earth elements are used in the semiconductor manufacturing process as high-k dielectric films and as polishing materials in chemical mechanical polishing. Ceria is also used in the polishing of glass disks to eventually transform them into disks for hard disk drives, LCD panels and LED's.
He also wrote that Europium prices have climbed 170% over the past year. Europium is used as a phosphor in cold cathode fluorescent lamps in laptop backlights and plasma display panel TVs. Neodymium, used in magnets for hard disk drives, wind turbines and hybrid electric vehicles have also seen a price hike of 420% over the past 12 months.
"During the past 20 years there has been an explosion in demand for many items that require rare earth metals. China capitalized on its rich rare earth deposits and cheap labor to drive down prices to a point that nearly every mine outside China was forced to shut down because they couldn't compete on price," according to Castellano.
"We estimate that the Chinese held 90.0 percent of capacity of rare earth oxides with 103,300 tons, but its share will drop to 67.2% in 2014 based on output of new mines coming on stream," said Castellano. "China's capacity will only increase 10.4% to 114,000 tons between 2010 and 2014, whereas non-Chinese capacity will increase nearly 5 fold, from 11,500 to 55,800 tons," he wrote.
Time will tell how harshly the embargo will affect actual consumers of high-tech products, which in today's world includes almost everyone.
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