If the future is green, who holds the aces?

31 July 2023

Whilst semiconductors shape digital transformation and are crucial to solve the energy challenges of our time – there are other essential raw materials involved in electric vehicle production, battery making, renewable energy systems and technology manufacturing.

Raw materials are the basic indispensable resources for the green transition

This means any manufacturing is still wholly dependent on the ‘rare earth’ raw materials supply chain, of which, China controls 36.7% of global reserves. Brazil and Vietnam, the next biggest suppliers, with a combined stockpile matching China, (18.3% each). They are followed by Russia, who have 10% of the world’s total rare earths, and India, which supplies 5.8%. The remaining 10.9% is unevenly distributed.

Rare earths and the domestic supply chain challenges

The Biden administration and Department of Energy outline their ambitious climate and technology policies, they have identified rare earths amongst their domestic supply chain priorities. While China is currently dominant, before the 1980s it was the U.S. that held a majority stake in this metals market. Supply slowly shifted as significantly lower labour costs drove growth in production abroad, coupled with mounting environmental pressures at home.

However, although the U.S. is making efforts to advance its current domestic rare earths supply chain, environmental regulations remain more stringent than their key suppliers. As a result, its developing alternatives to mining rare earths and the recycling of key raw materials used in the EV space, is now receiving greater investment focus.

Meanwhile in Europe, the European Commission unveiled a new regulation in March 2023, setting targets for the production, refining and recycling of key raw materials needed for the green and digital transitions. On the back of this, the White House and the EU have announced a transatlantic agreement, designed to deepen their cooperation in the diversification of critical minerals and raw material supply chains; and to collaborate in defining export control and foreign investment mechanisms.

So what does this mean?

The short answer is that manufacturing will continue to encounter availability pressures for semiconductors, as the supply chains flex against this complex and dynamic backdrop. The supply and demand of semiconductors and any related components required, will also be competing with the growing needs of the fast-accelerating green agenda. Increased competition among manufacturers for in-demand products will remain fierce, as industrial and automotive sectors try and stay ahead of shortages and market trends before they affect production. Together with imbalance of the raw materials supply chain, the future remains unpredictable, and manufacturing supply chains need to be resilient.

How Whistler Technology can help improve your component supply chain resilience

With over two decades of experience, Whistler Technology has been dedicated to collaborating with customers in overcoming a wide array of day-to-day supply chain imbalances. Our team of experts excel in procuring the highest quality components, navigating through various supply and demand fluctuations, to effectively tackle your challenges and ensure seamless supply continuity for your business.

With our vetted supplier network, global testing facilities and efficient logistics, we find and deliver your parts swiftly, ensuring unparalleled service.

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