Rare earth elements (REEs) differ significantly from conflict minerals in all but one aspect: their availability—or lack thereof—has the potential to disrupt the electronics supply chain.
REEs are exactly as they sound: compounds that appear in nature that are scarce or difficult to mine. Conflict minerals – also natural elements – are concentrated in regions where their yields are associated with human right violations. Currently the most viable REEs are concentrated in China, which effectively has a lock on that market. U.S.-based companies are required to divulge their use of conflict minerals, effectively discouraging businesses from sourcing them from conflicted regions.
According to a recent report by Information Network, the prices of REEs have spiked in recent years. REEs are used in CMP polishing slurries and as high-k dielectrics in the semiconductor industry. Prices of ceria, used in STI planarization slurries, have increased 1300% between 2009 and 2010 because of an embargo by China, home to 97% of the rare earth mines.
The embargo also impacts high-tech industries such as HDDs, LCDs, consumer products, and green technology. Manufacturers of a broad spectrum of high-tech products have been feeling the impact of price hikes in rare earth element-based processing materials because of the Chinese embargo in late 2010, according to the report. China, which accounts for 90 percent of global rare earth supplies, has been tightening trade in the strategic metals since late 2010, resulting in an explosion in prices. REE are forecast to become a $14 billion market by 2017.
Some key facts from the report:
- Japan accounts for a third of global demand and has been looking to diversify its supply sources, particularly of heavy rare earths such as dysprosium used in magnets.
- In semiconductor manufacturing, rare earth materials are used as high-k dielectric films and as polishing materials in CMP. Prices of ceria, used in STI planarization slurries, increased 1300% a few years ago.
- Ceria is also used in the polishing of glass disks for hard disk drives (HDDs), LCD panels, and high brightness LEDs (HBLEDs).
- Europium is a rare earth used as a phosphor in Cold Cathode Fluorescent Lamps (CCFL) used in backlights for notebooks and in PDP TVs. Price hikes of 170% in the a few years ago for Europium filtered down the supply chain to manufacturers of these end products.
- Neodymium is a rare earth element used in magnets for HDDs, wind turbines, and hybrid electric vehicles. Neodymium is already in short supply, and prices have increased 420%.
According to the report, China can supply rare earth products as pure as 99.9999%, while French companies can only produce 99.999% pure products and Japanese firms generally produce 99.9% purity products. With a supply chain of raw material and refining prowess, this is a wake-up call for non-Chinese mining operations, governments, and corporations to take proactive steps to get out of the stranglehold China has on the rest of the world.
In the meantime, electronics companies are struggling with the reporting requirements of conflict-mineral use. The majority of electronics companies failed to comply with the voluntary reporting requirements which began this year.