New reports indicate that supplies of yttrium and scandium, two niche but essential minerals largely controlled by China, are tightening across US aerospace and semiconductor supply chains despite an easing of trade tensions between Washington and Beijing.

Supply Crunch Hits Aerospace

The most immediate pressure is coming from yttrium, a key material used in heat-resistant coatings that prevent aircraft engines and turbines from melting under extreme temperatures.

Without these coatings, engines simply cannot operate safely.

Since China introduced export restrictions last year, supplies to the US have not recovered. Prices for yttrium oxide have surged sharply, jumping 60 percent in recent months and now trading at roughly 69 times last year’s levels.

As a result:

• Some aerospace suppliers have begun rationing yttrium
• Two North American firms have already temporarily paused production
• Smaller customers are being cut off to preserve supply for major engine manufacturers

Industry insiders describe the situation as manageable for now, but increasingly fragile.

“This is a tangible example of how China is flexing its rare earth muscle,” said aerospace supply chain specialist Kevin Michaels.

5G Chips Now at Risk

At the same time, US semiconductor firms are running low on scandium, a rare metal used in:

• Advanced chip packaging
• Fuel cells
• Aerospace alloys
• Key components in 5G smartphones and base stations

Global production of scandium is extremely limited, measured in just tens of tons per year, and the US currently has no domestic production capacity.

Delays in Chinese export licenses have left chipmakers scrambling for alternatives. Industry sources warn that existing stockpiles may last months, not years, raising concerns about potential disruptions to next generation 5G infrastructure.

“Our thesis is that it is precisely the semiconductor industry being targeted,” one US official said.

Strategic Pressure Ahead of Summit

The timing is notable. The shortages are unfolding just weeks before a planned meeting between Trump and Chinese President Xi Jinping in Beijing, where critical mineral access is expected to be a key topic.

Although some rare earth exports resumed after an October trade détente, shipments of yttrium and scandium to the US remain significantly below previous levels.

China exported just 17 tons of yttrium products to the US in the eight months following export controls, compared to 333 tons in the eight months prior.

A Structural Vulnerability

While jet engine production and chip output have not yet been directly affected, officials warn that continued supply constraints could create bottlenecks across:

• Defense systems
• Commercial aviation
• Semiconductor manufacturing
• 5G rollout

With the US still lacking meaningful domestic sources of scandium and limited alternatives for yttrium, the episode underscores a deeper reality.

Rare earths are becoming not just a supply chain issue, but a geopolitical lever.

Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.

Related: Nvidia Earnings Preview: A Defining Test for the AI Boom