Minister of Economic Affairs: Plans to Establish Rare Earth Pilot Production Line Within Three Years to Meet 50% of Domestic Demand

Source：TPCA　Updated Time：2026/02/04

The 6th Taiwan-U.S. Economic Prosperity Partnership Dialogue (EPPD) has concluded. Taiwan’s Minister of Economic Affairs, Kung Ming-hsin, stated today that the talks focused on four major pillars: strategic alignment on supply chain security, cooperation on critical minerals, third-country cooperation, and bilateral economic cooperation. Regarding rare earth elements, the Ministry of Economic Affairs is supporting the Industrial Technology Research Institute (ITRI) in developing domestic rare earth R&D and pilot-line technologies, with plans to establish a trial mass-production line within three years to meet 50% of Taiwan’s domestic demand. The U.S. side expressed hope that Taiwan could replicate this experience in partner countries.

The first pillar, “Strategic Alignment on Supply Chain Security,” includes ensuring AI supply chain security, which was a key request from the United States. Considering Taiwan’s critical strengths in semiconductor manufacturing and AI servers within the AI ecosystem, both sides aim to establish AI and advanced technology partnerships under the Silicon Prosperity Initiative framework, with participation from both governments and private enterprises. Additionally, Taiwan hopes to develop a Traditional Chinese-centered language corpus and collaborate with the United States to promote it internationally. Kung noted that the U.S. expressed agreement, and both sides will further explore implementation methods. He further emphasized that Taiwan has proposed strengthening digital infrastructure as part of supply chain security alignment. This aligns closely with Taiwan’s Five Trusted Industry Sectors initiative, covering submarine cable security, low-earth orbit (LEO) satellite cooperation, ground-based 5G Open RAN, and future 6G development trends. Both sides aim to deepen cooperation in technology, supply chains, and market promotion, with the U.S. expressing a positive stance. Progress was also made in drone supply chain cooperation, with both sides agreeing to continue collaboration on commercial drone development, joint production, regulations, and certification.

The second pillar, “Critical Minerals Cooperation,” highlights the shared priority of ensuring the security and resilience of rare earth supply chains. The Ministry of Economic Affairs is supporting ITRI in developing domestic rare earth R&D and pilot-line technologies. Originally planned to meet one-third of Taiwan’s demand, the target has now been increased to approximately 50%, with a trial mass-production line expected to be established within three years. The United States believes that if this mass-production model proves successful, it could be replicated in other countries to help strengthen global rare earth supply chain security.

The third pillar, “Third-Country Cooperation,” is led by Taiwan’s Ministry of Foreign Affairs and focuses on collaboration with Taiwan’s diplomatic allies, prioritizing regional initiatives in the Philippines and Latin America.

The fourth pillar, “Bilateral Economic Cooperation,” includes Taiwan’s hope that the United States will promptly pass legislation related to the Agreement for the Avoidance of Double Taxation (ADTA). This agreement would significantly impact Taiwanese businesses investing in the U.S. as well as U.S. companies investing in Taiwan. The United States acknowledged both its necessity and urgency and agreed to facilitate progress through coordination between the executive branch and Congress. Regarding investment review matters, both sides will continue existing cooperation and share experiences through expert-level meetings. Kung emphasized that Taiwan and the United States have highly complementary economic structures, allowing for deeper cooperation and mutually beneficial outcomes. Following the dialogue, both sides have agreed to establish multiple working groups to continue advancing related projects. Further announcements will be made once more concrete results are achieved. (Source: Central News Agency)

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