Alarms ring at speaker, wearables, TV makers on Chinese rare-earth squeeze

Time of India

6 hours ago

It's not just electric vehicles,
China
's
export control
licensing of
rare earth metals
is creating panic among speakers, wearables, and television manufacturers who are sitting on thin supplies of
permanent magnets
with the threat of production coming to a standstill looming large, industry executives and associations said.
Among the seven rare earth metals facing restricted exports, terbium and dysprosium are critical components in neodymium-Iron-Boron (NdFeB) magnets, or permanent magnets, which is the preferred choice for high-performance, portable and compact audio products.
These magnets account for 5-7% of the bill of materials (BoM), depending on the product category, and
electronics
manufacturers in India import nearly 100% of their requirements from China, industry association ELCINA (Electronics Industries Association of India) said in a whitepaper presented to the government highlighting the issue.
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'Inability to procure
NdFeB magnets
may halt speaker manufacturing lines in Noida, Chennai, and Pune. OEMs may switch to importing finished speakers, reversing the gains made under Make in India,' ELCINA said.
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Shipments of magnets and even finished products with embedded magnets are being stopped at Chinese ports, pending end-use declarations. This is leading to production disruptions of speaker assembly units in India, delaying supplies to customers including domestic TV and audio brands, the industry body said.
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Arjun Bajaj, director at TV maker Videotex, confirmed that there have been delays from their supplier side due to non-availability and delayed shipments of permanent magnets from China. This has disrupted their product roadmap, fuelling the search for alternatives and solutions.
'We are working closely with our suppliers to ensure adequate stock for the upcoming season, thereby maintaining production continuity.' Bajaj said. "Additionally, based on supplier guidance, we are actively exploring alternative solutions such as ferrite magnets, which offer reasonable performance trade-offs," he added.
Another TV manufacturer Super Plastronics Pvt. Ltd. that sources speakers from Indian contract manufacturers, said Chinese exporters have been waiting for over 60 days for license approval.
'If imports are impacted, consumers will suffer on sound quality as there is no alternative with that compact size to have that kind of sound output,' said Avneet Singh Marwah, CEO at SPPL.
Speaker maker Sunvoice Electronics currently has only one month's stock till July, which is sufficient for current production, but will bring production to a halt unless its customers approve the use of inferior alternatives such as ferrite magnets.
'We will not be able to manufacture speakers. We have started looking for alternatives such as ferrite magnets, even though they are of inferior quality, as a short-term mitigation strategy. For standalone loud-speakers, magnets make up almost 50% of the cost of production,' said Chacko Mathew, CMD, Sunvoice Electronics, which supplies to Dixon Technologies, Videotex, Panasonic and more.
'But this is a compromise. Ferrite magnets, while cheaper, are also heavier and do not offer the same sound quality as Neodymium,' he added.
Speaker manufacturers and importers have approached the government for end-use certificates required as part of the Chinese exporter's license approval process where they must provide extensive traceability documentation.
Ashok Chandak, president, India Electronics and Semiconductors Association (IESA), said the current situation can be partially blamed on Indian manufacturers who ignored the risk back in 2020.
"While several countries, including India, possess reserves of critical minerals, the lack of local processing capabilities—largely due to economic viability and limited market size (often just a few hundred million USD per material)—has led to an overdependence on imports," he said.
Following the announcement of export control in April, prices of China-origin magnets have increased by 15% due to tightened supply, Mathew said, adding that ongoing negotiations with suppliers indicate that if import resumes, costs will remain elevated.
However, prices of permanent magnets almost double when sourced from Japan, Vietnam, and even when procuring recycled magnets from Indian companies, while availability is limited and inconsistent, according to a price analysis done by ELCINA.