Medical devices supply chains at risk as China tightens rare earth exports

Sectors most exposed include MRI and X-ray device production.

China’s move to expand export controls on 12 rare earth metals used in medical imaging and diagnostic equipment is expected to heighten risks for global manufacturers, said GlobalData.

Medical devices reliant on rare earth metals generated more than $9b in global sales in 2024. The market is projected to exceed $15b by 2036; however, the new export controls could slow or reverse growth.

Sectors most exposed include MRI and X-ray device production. Equipment containing computer chips could also face supply challenges.

“There is a great deal of uncertainty for medical device manufacturers as the trade war between China and the US continues,” said David Beauchamp, Medical Analyst at GlobalData.

The latest measures follow US export restrictions on semiconductor manufacturing equipment bound for China, imposed over concerns about military applications of advanced chips.

The tightened rules extend existing export controls on seven rare earth elements, including gadolinium, dysprosium, and yttrium, whilst adding five new metals such as holmium, thulium, and europium.

“As China is currently the leading producer of rare earth metals, medical device manufacturers will continue to rely on China for the components needed for cutting-edge medical technology,” Beauchamp added.