Europe's Chip Industry Sounds the Alarm: Rare Earth Export Controls Now Rank Among the Greatest Strategic Risks

Highlights

• 55 semiconductor industry leaders and experts ranked export controls on rare earths, magnets, and chemicals among the highest threats to Europe's chip supply chain.
• A Taiwan Strait conflict was rated the single greatest individual geopolitical risk to European semiconductor security through 2031.
• Europe's structural weaknesses—limited capital, high energy costs, skilled labor shortages—pose equally serious threats to long-term competitiveness.
• China's expanding export controls on rare earths and critical materials from 2023 to 2026 directly shaped expert risk assessments.
• The report reinforces that strategic competition now centers on controlling the full rare earth and semiconductor value chain, not just raw material extraction.

A new policy paper led by Joris Teer (opens in a new tab) of the European Union Institute for Security Studies (opens in a new tab) (EUISS), together with Pierre Sel (opens in a new tab) of Institut Montaigne (opens in a new tab) and the CHIPDIPLO consortium (opens in a new tab), concludes that Europe faces a far more dangerous semiconductor landscape over the next five years than many policymakers appreciate. Based on a survey of 55 semiconductor industry leaders, policymakers, researchers, and think-tank experts, respondents identified export controls on critical raw materials, magnets, and chemicals as one of the most severe threats to Europe's semiconductor supply, while rating a Taiwan Strait conflict as the single greatest individual geopolitical risk. For Rare Earth Exchanges® readers, the message is unmistakable: Great Powers Era 2.0 has arrived, and rare earth supply chains have become instruments of economic and national security.

How the Study Worked

Rather than forecasting markets, the authors surveyed 55 experts across Europe's semiconductor ecosystem, asking them to score 20 geopolitical, economic, legal, and industrial risks according to their overall threat—defined as a combination of probability and impact—to two separate objectives: security of semiconductor supply and Europe's long-term semiconductor competitiveness through 2031. This is a structured expert-risk assessment rather than an empirical market forecast.

The Rare Earth Connection

For REEx readers, the standout finding is clear. Respondents ranked export controls on raw materials, magnets, and chemicals among the highest overall threats to Europe's semiconductor supply chain, alongside restrictions on semiconductor equipment and technologies. The report specifically notes that China's expanding export controls on rare earths and other critical materials between 2023 and 2026 likely influenced these assessments. Meanwhile, a Taiwan Strait conflict emerged as the single highest-rated individual geopolitical risk.

The survey also found that Europe's own structural weaknesses—including limited private capital, high energy and commodity prices, shortages of skilled workers, and declining downstream industries—pose equally serious threats to the continent's long-term competitiveness.

Limitations—and What the Report Leaves Out

The findings represent expert judgment rather than measured probabilities or predictive modeling. The authors acknowledge the relatively modest sample size and note that future surveys should include additional risks, particularly intellectual property theft, commercial espionage, dependence on non-EU cloud and AI providers, and regulatory fragmentation.

REEx Perspective

The report independently validates a central REEx thesis: the strategic contest is no longer about who mines rare earth elements and critical minerals—it is about who controls the industrial ecosystem built around them. Rare earth magnets, gallium, germanium, semiconductor equipment, advanced materials, and downstream manufacturing are increasingly inseparable components of the same geopolitical supply chain.

In Great Powers Era 2.0, nations are competing not simply for resources, but for resilience, industrial capacity, and technological sovereignty. Whoever controls the value chain—not merely the mine—will increasingly shape the balance of economic and strategic power. It’s a race with profound implications.

Citation: Teer, J., & Sel, P. The EU Semiconductor Geopolitical Risk Survey: Outlook for 2026–2031. CHIPDIPLO, European Union Institute for Security Studies, Institut Montaigne, July 2026.

Register today: REEx Marketplace™ (opens in a new tab)