China rare earth export curbs impact global data centers

China's export restrictions on rare earth metals are beginning to impact global data center operations. The IEEE has warned of significant decreases in the supply of essential materials used in IT equipment.

Specifically, exports of yttrium—a critical component for LED lighting, displays, lasers, and ceramic capacitors—have dropped by approximately 75 percent compared to 2025 levels. Additionally, erbium, which is used in amplifiers for fiber-optic networks that connect data centers, is also subject to tightening regulations. While some restrictions on erbium were temporarily suspended in November 2025 following trade talks between the US and China, a decision on whether to extend or tighten these rules is expected soon.

China maintains a dominant market position, accounting for roughly 90 percent of global yttrium mining and nearly all of its processing. In response, the United States is attempting to reduce its dependency; the US Department of Defense has allocated $750 million to secure rare earth metal supplies for magnets via a production facility in Brazil.