TAIPEI — Electronic hardware manufacturers are sweating as prices for rare-earth metals surge amid soaring demand and simmering tensions between the U.S. and China, the world’s most important source of these vital materials.
For Max Hsiao, senior manager of an audio component maker based in Dongguan, China, the squeeze is coming from a magnetic alloy known as praseodymium neodymium. The price of the metal, which Hsiao’s company uses to assemble speakers for Amazon and laptop maker Lenovo, has doubled since June last year to around 760,000 yuan ($117,300) a ton this August.
“The rising cost of this key magnetic material has been overwhelming, and that knocked at least 20 percentage points off our gross margin. …That’s really a huge impact,” Hsiao told Nikkei Asia. “We don’t see this trend reversing anytime soon.”