Key facts
- Shin-Etsu Chemical will construct a new rare-earth refinery in Fukui, Japan.
- The investment in the new facility is approximately $220 million.
- The refinery will produce critical elements like dysprosium, terbium, and yttrium.
- These materials are vital for electric vehicle motors and semiconductor manufacturing.
- The initiative seeks to decrease Japan's dependence on China for rare-earth supplies.
Shin-Etsu Chemical is set to construct a new rare-earth refinery in Fukui, Japan, marking the country's first new refinery since 2008. The company plans to invest approximately $220 million to boost its capacity for supplying critical elements such as dysprosium and terbium, which are essential components in electric vehicle motors. The refinery will also produce yttrium, a material used in semiconductor manufacturing equipment. This strategic move aims to reduce Japan's significant reliance on China for rare-earth supplies.
Japan has a history of vulnerability regarding rare-earth imports, notably experiencing an effective embargo from China in 2010 during a territorial dispute. This event underscored the geopolitical risks associated with China's near-monopoly on rare-earth processing. In response, Japan has been quietly working to establish a more diversified supply chain, a strategy that involves international collaboration and sustained government support.
The new facility will become Shin-Etsu's fourth production base for semiconductor lithography materials, with the first phase of construction expected to be completed by 2026. This expansion is driven by growing demand for advanced semiconductor materials and the need to diversify business continuity risks.