A Chip Needs Just 0.1% Chinese Rare Earth, By Value, to Need Beijing's Permission. The Truce Expires in 74 Days.
China's toughest rare-earth export rule doesn't measure kilograms — it measures dollars. Any product, made anywhere, containing Chinese-refined rare earth worth just 0.1% of its price tag can need a Chinese export license. That rule is paused today. The pause ends November 10.
The trigger isn't how much rare earth is in a product. It's what share of its value.
Illustrative scenario, not a real company's disclosure: drag the slider to set a hypothetical product's Chinese-refined rare-earth content as a share of total value (0.00%–6.00%). Watch the status flip the instant it crosses 0.1% — China's actual licensing threshold under Notice 61. Preset percentages are rounded, illustrative approximations of typical component-value shares, chosen to show how small the trigger is, not disclosed figures.
The plain version
Somewhere inside the machines that make an advanced computer chip, there's a wafer-thin disc of a metal you've probably never heard of: yttrium. It isn't part of the chip — it's ammunition for the equipment that builds the chip, sputtered onto silicon in a vacuum chamber to lay down microscopic film layers. China refines something like 90% of the world's yttrium, along with dozens of other "rare earth" elements used in small amounts across chipmaking, batteries, jet engines, and electric motors.
In October 2025, Beijing wrote a new export rule, and it's a strange one. It doesn't care how much yttrium, by weight, ends up in your product. It cares about value. If a product — built anywhere in the world, by any company — contains Chinese-refined rare-earth material worth 0.1% or more of that product's total value, China can require its own government's permission before that product can be shipped onward. A sliver of metal worth a few dollars, buried inside a $50,000 piece of chipmaking equipment, could be enough to clear that bar.
That toughest version of the rule is currently on pause, part of a one-year trade truce Washington and Beijing struck last November. The pause ends November 10, 2026 — 74 days from today. Meanwhile, a narrower slice of controls covering yttrium and six other elements never paused at all: yttrium shipments into the US reportedly collapsed by roughly 95% after the original rule took effect.
Chipmakers, equipment makers, and the AI data centers that depend on both are now racing to either qualify rare-earth suppliers outside China's refining monopoly, or find out what happens when the pause runs out.
The expert version
On October 9, 2025, China's Ministry of Commerce issued Notice 61, one of the most aggressive extraterritorial export-control mechanisms applied to a raw material to date. It mirrors the logic of the US Foreign Direct Product Rule but flips it: any foreign-manufactured item — regardless of where it was produced — becomes subject to Chinese export licensing if it incorporates or is commingled with PRC-origin rare-earth material at or above 0.1% of the item's value. The notice explicitly names rare-earth permanent magnets and certain sputtering targets, and the trigger applies at the component level, not only the finished-product level.
Yttrium and yttrium-oxide sputtering targets matter here because they deposit high-k dielectric and diffusion-barrier thin films — including yttria-stabilized zirconia layers — in advanced logic and memory fabrication. Scandium plays an analogous role in aluminum-scandium alloys and specialty ceramics used in aerospace and RF hardware. Both were added, along with five other medium/heavy rare earths, to China's standing Category 3 dual-use control list in April 2025 — a control that predates, and survives, the November trade truce.
The November 2025 trade framework suspended Notice 61's extraterritorial 0.1%-value trigger for one year, through November 10, 2026, while leaving the April 2025 elemental controls in force. That partial carve-out still produced a measurable shock: yttrium shipment volumes into the US reportedly fell by roughly 95% after the October 2025 controls took hold. Because China holds an estimated 90% of global rare-earth separation and refining capacity, qualifying alternative, semiconductor-grade yttrium and scandium sources outside that system remains a multi-year undertaking, not a matter of opening a new mine.
What happens on November 10 is binary, not gradual: Beijing can extend the suspension, let Notice 61's extraterritorial scope snap back into force, or expand it further. Any of those outcomes functions as a discrete policy event for every company shipping a component that clears the 0.1% value line.
Why it matters for tech + supply chain: if Beijing lets the toughest version of this rule snap back on November 10, almost any advanced chip tool, server, or component with even a sliver of Chinese-refined rare earth in it could need a permission slip from Beijing before it can ship — anywhere in the world.
Why it matters for tech + supply chain: a value-based, extraterritorial licensing trigger converts rare-earth exposure into a customs-classification and compliance problem for nearly the entire semiconductor and AI-hardware supply chain, not just mines and magnet makers — and it turns November 10 into a discrete, binary risk event rather than a gradual one.