China’s weaponisation of its rare earth dominance is reshaping global supply chains. Export restrictions imposed earlier this year pushed prices sharply higher, reversing losses and propelling Chinese miners into strong profit. At the same time, Thailand has rapidly become a new manufacturing base for printed circuit boards (PCBs), attracting dozens of Chinese and Taiwanese firms seeking to diversify away from geopolitical flashpoints.

Rare Earths: From Losses to Record Gains

After years of volatility, China’s miners are reaping rewards. China Rare Earth Group posted a 62% revenue jump to RMB1.87bn ($262mn), swinging from a net loss of RMB244mn last year to a profit of RMB161.7mn. China Northern Rare Earth, the country’s largest producer by volume, saw profits soar more than twentyfold to RMB931mn in the first half of 2025.

The export curbs—covering seven critical minerals—have left Western industries scrambling but underscored how vulnerable Chinese producers remain to long-term price swings. Companies warn that the U.S. and Australia’s push to build alternative supply chains could dilute China’s global pricing power.

AI Chips and Domestic Strategy

China is simultaneously accelerating efforts to triple its artificial intelligence processor output next year. New fabrication plants, including three dedicated to Huawei, are set to expand production capacity, while SMIC is doubling its 7-nm output. Domestic AI firms such as DeepSeek are driving development of new chip standards to close the technology gap with global leaders.

Thailand’s PCB Boom

Thailand has emerged as a major beneficiary of shifting supply chains. Military tensions around Taiwan triggered a “Taiwan-plus-one” strategy, prompting nearly 60 PCB makers from China and Taiwan to establish operations there since 2022. PCBs, essential in everything from smartphones and cars to AI servers and aircraft, are now at the heart of Thailand’s bid to become a tech manufacturing hub.

Industry executives say AI demand—particularly for servers and high-performance graphic cards—is driving the once-in-a-generation relocation of the PCB sector. This diversification reduces reliance on Taiwan while embedding Thailand more firmly in the global tech ecosystem.