90% of Rare Earth Refining is in China's Hands, American Humanoid Robot Mass Production Faces a Hardware Bottleneck

Author: Serenity

Compiled by: Deep Tide TechFlow

Deep Tide Intro: All the discussions about the robot revolution focus on AI and software, but this tweet points out a more fundamental structural risk: China controls 70% of global rare earth mining, 85-90% of refining and separation capacity, and over 90% of rare earth magnet manufacturing. The joints and actuators of humanoid robots like Optimus all rely on Chinese or Japanese suppliers; what the US retains is just the "brain." The author uses specific material lists and Morgan Stanley's demand forecasts to quantify this bottleneck, projecting its impact on rare earth reserves in the era of 1 billion humanoid robots.

Full Text Below:

The United States is losing the robot and humanoid robot race with China.

Software and AI are only half the battle.

China holds a kill switch over the US robotics hardware supply chain because: The US cannot manufacture the materials needed for humanoid robots at scale and at a reasonable cost.

If China presses this "kill switch," the entire US robotics build-out will slow down—because China has dominant control over the "body" (actuators, reducers, metallurgy) and the raw materials required to manufacture humanoid robots.

Consequently, US robotics companies have signed contracts with Chinese manufacturers to procure all humanoid robot components, in order to assemble products like Optimus at a low enough cost. However, they are trying to keep the "brain" in the US.

Look at all the top robotic transmission/motion suppliers; none are from the US:

• Leaderdrive (China): Harmonic reducers
• Harmonic Drive (Japan): Harmonic reducers
• Nabtesco (Japan): RV reducers
• Sanhua Intelligent (China): Linear actuator assemblies
• Zhejiang Shuanghuan Transmission (China): RV reducers/gears
• Shenzhen Inovance Technology (China): Servo systems/ball screws

There is a core reason behind this:

China currently controls nearly 70% of global rare earth mining, and more critically, holds 85% to 90% of global refining and separation capacity, and over 90% of finished rare earth magnet manufacturing.

Therefore, the biggest threat is: Chinese export controls pose a structural risk hanging over US robotics projects.

Beijing has already demonstrated a willingness to weaponize this monopoly, as Japan did in a similar situation.

To break the dependence on the robotics and Optimus supply chain and ensure the robot revolution can proceed domestically, Western capital needs to flow to companies rebuilding the rare earth ecosystem, covering:

• Upstream mining
• Midstream separation/metallization
• Downstream magnet manufacturing

If the global number of humanoid robots reaches 1 billion by 2050—a baseline scenario in Morgan Stanley's model—it would require approximately 400,000 tons of neodymium, 80,000 tons of dysprosium, and 16,000 tons of terbium. This would consume about 15% of the world's known neodymium reserves, 25% of dysprosium reserves, and 30% of terbium reserves, constituting a demand shock.

In short: China has control over the US robotics hardware supply chain.

Now is the historical moment when the US must invest in securing its own supply chain to ensure victory in the robotics race with China.

The key lies in rare earths, a prerequisite for producing robotic humanoid hardware at competitive prices.

Here are the areas the US government needs to focus on:

1. Magnet Metals (for frameless torque motors)

Neodymium (Nd) and Praseodymium (Pr): These "light rare earths" are the core components of NdFeB magnets

Dysprosium (Dy) and Terbium (Tb): Rare earth elements alloyed into magnets

Samarium (Sm) and Cobalt (Co): Used to make SmCo magnets

Boron (B) and Iron (Fe): Key stabilizing minerals, accounting for about 1% of the weight of NdFeB magnets

2. Structural Metallurgy (for harmonic reducers and planetary roller screws)

Titanium (Ti), Vanadium (V), and Molybdenum (Mo): Gears in harmonic reducers and threaded shafts in planetary roller screws

Niobium (Nb), Chromium (Cr), Nickel (Ni), and Manganese (Mn): Critical microalloying elements added to structural steel to improve toughness, prevent corrosion, and significantly reduce robot joint weight

Cerium (Ce) and Lanthanum (La): Prevent premature failure of robot gears

3. Computing Power, Perception & Power Supply (Brain, Eyes, and Battery)

Gallium (Ga) and Germanium (Ge): Indispensable for advanced semiconductors, LiDAR systems, and high-frequency communication chips

Lithium (Li), Graphite (C), and Copper (Cu): A single full-size humanoid robot requires approximately 2 kg of lithium, 3 kg of graphite, and up to 6.5 kg of copper

Key Company List

The most important US companies to secure the above capabilities are:

1. Magnet Metals (Nd, Pr, Dy, Tb, Sm, Gd):

$UUUU, $MP, $ALOY, $USAR, $LYSDY (Lynas Rare Earths), $NEO (TSX), $ILU, $ARU (ASX)

2. Structural Metallurgy (Nb, V, Ti, Be):

$ATI, $CRS, $FCX, $NB, $MTRN, $LGO

3. Computing Power, Perception & Power Supply (Ga, Ge, Graphite, Battery Metals):

$BMM, $VNP, $TECK, $ALB, $EAF, $ALTM, $SYR, $FCX, $AW1 (ASX)

Taking a robot joint as an example, it is a permanent magnet motor requiring a neodymium processing supply chain:

1. Neo Performance Materials (TSX: NEO)

2. $MP

3. $UUUU—Processes monazite concentrate into NdPr oxide

The US government should meticulously review the Bill of Materials (BOM) for each robotics supply chain and then invest heavily to ensure processing capacity for raw materials.

Currently, the transmission systems needed to manufacture humanoid robots, as well as the global infrastructure to produce these components, are highly concentrated in China.

The US is highly vulnerable in the physical robotics supply chain. Securing domestic metal and midstream processing capabilities is crucial for competing with China.

The US must invest heavily in critical material supply chains today to maintain long-term dominance in the robotics industry.