Businesses across the global semiconductor supply chain are bracing themselves for disruptions from China’s most targeted move yet to limit their supplies of rare-earth materials as part of an escalating trade war between the Asian nation and the US. 

The restrictions may lead to weeks-long delays in shipments for ASML Holding NV, the only manufacturer in the world of machines that make the most advanced semiconductors, a person familiar with the company said.

The company is preparing for disruptions, particularly due to a clause that requires foreign firms to seek China’s approval for re-exports of products containing its rare earths, said the person, who asked not to be identified discussing private matters and noted that ASML is lobbying Dutch and US allies for alternatives. The company declined to comment. 

A senior manager at a major US chip company said the firm is still assessing potential impacts. But the clearest risk the company is facing now is an increase in the prices of rare earths-dependent magnets that are critical to the chip supply chain, the person said, asking not to be identified discussing operations.

An official at another US chip company said the business is rushing to identify which of its products contain rare earths from China and is worried that the country’s requirement for licences will grind its supply chain to a halt.

The restrictions represent the first major attempt by Beijing to exercise long-arm jurisdiction over foreign companies to target the semiconductor industry, threatening to stall the chips powering the AI boom. They prompted US President Donald Trump to announce on Oct 10 that he would impose an additional 100 per cent tariff on China and export controls on “any and all critical software”.  

China’s new rules require overseas firms to seek approval for shipping any material containing even trace amounts of Chinese rare earths – and explicitly call out parts used to make certain computer chips and advance AI research with military applications.  

“These are the strictest export controls that...