U.S. and Japan race for critical minerals as China tightens grip on chip supply chains
The next major battle in the global technology race may not be fought inside a semiconductor factory — it may begin with the minerals needed to make the chips in the first place.
The United States and Japan are accelerating efforts to build alternative supplies of critical minerals and rare earth materials as China’s export controls continue to create uncertainty for semiconductor, defense, aerospace and other high-tech industries.
The pressure has intensified in recent months, with manufacturers facing tighter licensing requirements, longer delays and higher prices for strategically important materials including gallium, germanium, indium and rare-earth elements. Asia Times reports that Washington and Tokyo are now pouring government support into mining, refining and recycling projects designed to reduce their exposure to Chinese-controlled supply chains.
China still holds a powerful position
China’s influence is particularly significant because mining is only part of the equation. Processing and refining capacity are crucial, and Beijing has built a dominant position in several parts of the global critical-minerals supply chain.
The latest disruption is already being felt by U.S. companies. Reuters reported on September 4 that some Chinese rare-earth suppliers have declined to ship materials to U.S. customers because of concerns about potential repercussions from Beijing. Some U.S. buyers have reportedly waited more than six months for mineral licenses.
The materials involved are not simply commodities. Gallium and germanium are used in advanced electronics, while indium phosphide is important for optical and semiconductor applications. Tungsten and rare-earth materials also have applications spanning defense, aerospace and other sensitive industries.
That makes the mineral supply chain an increasingly important part of the U.S.-China technology rivalry.
Washington is putting serious money behind domestic production
The United States is responding with a major push to expand domestic processing and recycling.
On August 20, the U.S. Department of Energy announced $500 million for seven projects aimed at expanding critical-mineral and material processing, battery manufacturing and recycling capacity inside the United States. The department said the program is intended to reduce reliance on foreign sources and strengthen economic and national security.
The U.S. government has also backed a new gallium project in Western Australia.
The U.S. Department of Defense announced a $174 million equity investment in a facility at Alcoa’s Wagerup refinery designed to produce gallium, with planned annual output of about 100 metric tons. Japan’s Sojitz and Australian government-linked financing are also involved in the project.
Japan’s JOGMEC separately confirmed its final investment decision for the same Western Australian gallium project in July, working with Sojitz, Alcoa and government-related organizations from the United States and Australia.
Japan faces an even more immediate challenge
For Tokyo, the issue is particularly sensitive because China’s restrictions have directly affected Japanese access to strategic minerals.
According to Asia Times, Chinese rare-earth exports to Japan fell 51% year-on-year during the first half of 2026, while Japan received no gallium or germanium from China during January and February, followed by only a single gallium shipment in May.
Japan’s Ministry of Economy, Trade and Industry has acknowledged that Chinese export controls on critical minerals, including rare earths, have caused problems for Japanese companies, including delays in permits and prolonged customs inspections.
Tokyo is therefore looking beyond traditional imports.
Japan is exploring recycling, overseas mining projects and deep-sea mineral extraction while strengthening cooperation with countries considered reliable partners. Its resource-security agency, JOGMEC, already supports projects across multiple countries and is being given greater flexibility to invest in critical-mineral projects.
Washington and Tokyo are now building a shared strategy
The United States and Japan have already formalized cooperation on critical minerals.
In March 2026, U.S. Trade Representative Jamieson Greer announced the U.S.-Japan Action Plan on Critical Minerals, which calls for strategic trade policies and mechanisms designed to reduce supply-chain vulnerabilities and diversify critical-mineral production.
The two countries’ broader framework also calls for coordinated investment in mining, separation and processing capacity, with the goal of creating more resilient and diversified supply chains.
But building an alternative to China’s enormous processing network will not happen overnight.
New mines can take years to develop. Refining facilities require significant capital and technical expertise. Recycling can reduce pressure on primary supplies, but it cannot immediately replace large-scale mineral production.
That is why the current scramble matters.
The real threat may be the bottleneck — not an outright ban
The latest developments suggest that China does not necessarily need to completely shut off mineral exports to create pressure.
Licensing delays, tighter inspections, selective shipments and uncertainty can be enough to raise costs and force companies to rethink their supply chains.
Reuters reported that while some exports have recovered from earlier restrictions, supplies of materials such as yttrium, indium phosphide and tungsten remain tight, with some U.S. companies still waiting months for licenses.
For semiconductor manufacturers, defense contractors and technology companies, that uncertainty can be just as damaging as an outright embargo.
The result is a new front in the global technology race.
The United States and Japan are trying to build a supply chain that does not depend so heavily on China — but Beijing still possesses a formidable advantage in the minerals and processing infrastructure that modern technology requires.
And as the race for artificial intelligence, advanced chips and defense technology accelerates, the country that controls the materials behind those technologies could hold one of the world’s most powerful strategic advantages.
WWC ONE MEDIA M.J.E
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