China has announced additional global export controls on 12 rare earth metals, some of which are key to the production of certain medical devices. The controls were announced in response to US restrictions on chipmaking equipment in China over fears that advanced chips could be used in military applications.
Some rare earth metals are vital to certain medical device technologies, such as laser surgery devices and X-ray machines. Others are essential to semiconductor and chipmaking manufacturing, which are frequently used in a wide range of medical devices. China is responsible for more than half of rare earth metal extraction and nearly all rare earth metal refinement. These export controls could cause significant challenges in high-tech medical device manufacturing.
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China鈥檚 new export controls further tighten existing restrictions on seven rare earth metals including gadolinium, dysprosium and yttrium. The new restrictions add five new metals to this list, such as holmium, thulium and europium. These metals have important uses in medical device technologies, including for the magnets used in magnetic resonance imaging (MRI), laser surgical instruments and X-ray diagnostic equipment. Due to the highly specific needs of these devices, no elemental substitutes exist.
Medical device manufacturing is highly vulnerable to any change in the rare earth metal supply chain. Due to China鈥檚 effective monopoly on rare earth refinement, sources outside the country will be unable to address the increased demand if China decides to further restrict exports of these elements. The most vulnerable sectors include MRI machines and X-ray diagnostics, but any medical device that utilises computer chips could also face manufacturing pitfalls. New operations to extract and refine these metals could take years to begin production and would have to overcome the decades-long lead China has in the industry.
According to the GlobalData market analyser, more than $9 billion worth of medical devices reliant on these rare earth metals were sold worldwide in 2024. By 2036, this market is estimated to exceed $15 billion. Due to its reliance on Chinese metals, the export controls may cause the market to grow at a slower rate or to contract, depending on the severity of the controls and if any additional restrictions are put in place.
There is a great deal of uncertainty for medical device manufacturers as the trade war between China and the US continues. As China is currently the leading producer of rare earth metals, medical device manufacturers will continue to rely on it for the components needed for cutting-edge medical technology. As the uncertainty surrounding the relationship between the US and China continues, it remains to be seen how medical device companies will adapt.
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By GlobalData