Potential supply chain crisis for PM E-motors, ban on rare earths and magnet trade.
1. Global status as of April 15, 2025
The worldwide trade was unleashed by the Trump administration prompted a retaliation by China last week, which resulted in a total ban on exports on certain rare earths and a “soft” ban on export of rare earth based permanent magnets (which are used by ALL PM brushless servo motors by all and any suppliers).
2. Status with PM motors (which may change at any time)
Referring to the materials which are used in PM servo motors, the situation is the following: Of all rare earths which are banned from export, only Dysprosium is used in PM motors, and this is applied only in high temperature magnets usually reserved for critical applications (high speed, avionics).
However, the Chinese state introduced a licensing procedure for export of ALL FeNdB permanent magnets, which are used in all PM motors and on which China is almost a monopolistic supplier. Only a residual magnet production capacity exists in Japan, but the supply of rare earth material is almost exclusively Chinese so even that capacity is at risk.
The licensing procedure is being defined these days, and it is expected that any and all licensing, which will be subject to conditions (most likely related to the potential ownership or relation of the importer or final user with the US market) will take at least 2 months and a positive outcome is not guaranteed.
However, the export of finished motor parts which use magnets is so far not restricted.
It is to be expected that all motor production capacity outside China will be affected by delays and/or cost overruns as stocks are depleted and the new licensing system is not yet operational.
A significant turbulence in all E-motors market, from NC machine tools to avionics and general automation, is to be expected.
3. Potential impact on Phase Motion Control supply
Traditionally, Phase Motion Control sourced rotor semi machined parts with magnets assembled from its own China subsidiary, founded in year 2000, (acquired by local funds some time ago, but still fully functionally integrated). This supply is therefore exempted from restrictions.
In the last 3 years, in order to reduce costs and shorten delivery times, Phase progressively substituted, in selected motors, the sourcing of semi processed rotors with the sourcing of magnets only to be assembled on internally manufactured rotors. This change allowed significant cost and delivery time efficiencies but can be reversed without delay as all tooling still exists in the Chinese factory.
Phase can and will therefore protect all its customers, barring further evolution. Codes which may require a partial rerouting to the China factory for subcomponents may be marginally affected in price and delivery. Our sales organization will endeavor to timely inform Customers should this be the case.
I am personally sorry to bring such unsettling news, but in all events, to know is better than to hope.
With very Best Regards
Marco Venturini, Eng. D.
President
1. Global status as of April 15, 2025
The worldwide trade was unleashed by the Trump administration prompted a retaliation by China last week, which resulted in a total ban on exports on certain rare earths and a “soft” ban on export of rare earth based permanent magnets (which are used by ALL PM brushless servo motors by all and any suppliers).
2. Status with PM motors (which may change at any time)
Referring to the materials which are used in PM servo motors, the situation is the following: Of all rare earths which are banned from export, only Dysprosium is used in PM motors, and this is applied only in high temperature magnets usually reserved for critical applications (high speed, avionics).
However, the Chinese state introduced a licensing procedure for export of ALL FeNdB permanent magnets, which are used in all PM motors and on which China is almost a monopolistic supplier. Only a residual magnet production capacity exists in Japan, but the supply of rare earth material is almost exclusively Chinese so even that capacity is at risk.
The licensing procedure is being defined these days, and it is expected that any and all licensing, which will be subject to conditions (most likely related to the potential ownership or relation of the importer or final user with the US market) will take at least 2 months and a positive outcome is not guaranteed.
However, the export of finished motor parts which use magnets is so far not restricted.
It is to be expected that all motor production capacity outside China will be affected by delays and/or cost overruns as stocks are depleted and the new licensing system is not yet operational.
A significant turbulence in all E-motors market, from NC machine tools to avionics and general automation, is to be expected.
3. Potential impact on Phase Motion Control supply
Traditionally, Phase Motion Control sourced rotor semi machined parts with magnets assembled from its own China subsidiary, founded in year 2000, (acquired by local funds some time ago, but still fully functionally integrated). This supply is therefore exempted from restrictions.
In the last 3 years, in order to reduce costs and shorten delivery times, Phase progressively substituted, in selected motors, the sourcing of semi processed rotors with the sourcing of magnets only to be assembled on internally manufactured rotors. This change allowed significant cost and delivery time efficiencies but can be reversed without delay as all tooling still exists in the Chinese factory.
Phase can and will therefore protect all its customers, barring further evolution. Codes which may require a partial rerouting to the China factory for subcomponents may be marginally affected in price and delivery. Our sales organization will endeavor to timely inform Customers should this be the case.
I am personally sorry to bring such unsettling news, but in all events, to know is better than to hope.
With very Best Regards
Marco Venturini, Eng. D.
President