Author: Serenity

Translation: Deep Tide TechFlow

Deep Tide Introduction: All discussions about the robot revolution focus on AI and software, but this tweet points out a more fundamental structural risk: China controls 70% of rare earth mining, 85% to 90% of refining and separation capacity, and over 90% of rare earth magnet manufacturing. The joints and actuators of humanoid robots like Optimus rely entirely on Chinese or Japanese suppliers, with the United States retaining just the "brain." The author quantifies this critical issue with a specific material list and Morgan Stanley's demand forecast, determining the impact on rare earth reserves in the era of one billion humanoid robots.

The full text is as follows:

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

Software and AI are only half the battlefield.

China holds a shutdown button over the American robot hardware supply chain because the United States cannot economically produce at scale the materials needed for humanoid robots.

Once China presses this "shutdown button," the entire American robot development will slow down—because China has dominant control over the "body" (actuators, gears, metallurgy) and the raw materials required to manufacture humanoid robots.

As a result, American robot companies have signed contracts with Chinese manufacturers to procure all parts for humanoid robots to assemble products like Optimus at sufficiently low costs. However, they attempt to keep the "brain" in the United States.

Look at all the top robotic drive/motion suppliers; not a single one is from the United States:

• Leaderdrive (China): Harmonic Gear
• Harmonic Drive (Japan): Harmonic Gear
• Nabtesco (Japan): RV Gear
• Sanhua Intelligent (China): Linear Actuator Assembly
• Double Ring Drive (China): RV Gear/Gear
• Shenzhen Inovance Technology (China): Servo System/Ball Screw

There is a core reason behind this:

China currently controls nearly 70% of global rare earth mining, and more importantly, has mastered 85% to 90% of global refining and separation capacity, as well as over 90% of finished rare earth magnet manufacturing.

Thus, the greatest threat is: China's export controls pose a structural ceiling on U.S. robot projects.

Beijing has demonstrated a willingness to weaponize this monopoly, as Japan has experienced a similar situation.

To break the dependence on the robot and Optimus supply chain and ensure that the robot revolution can continuously advance domestically, Western capital needs to flow into companies that rebuild the rare earth ecosystem, covering:

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

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

In short: China has control over the U.S. robot hardware supply chain.

Now is the historic moment for the U.S. to invest in securing its supply chain to ensure victory in the robot race against China.

The key is rare earths, which is a prerequisite for producing humanoid robot hardware at competitive prices.

Here are the areas the U.S. government needs to focus on:

1. Magnet Metals (used for frameless torque motors)

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

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

Samarium (Sm) and Cobalt (Co): Used for manufacturing SmCo magnets

Boron (B) and Iron (Fe): Key stabilizing minerals, approximately 1% of NdFeB magnet weight

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

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

NIOBIUM (Nb), chromium (Cr), nickel (Ni), and manganese (Mn): Key micro-alloying elements added to structural steel to improve toughness, prevent corrosion, and significantly reduce robot joint weight

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

3. Computing Power, Perception, and Power Supply (brain, eyes, and batteries)

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

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

Key Company List

Here are the most important U.S. companies ensuring the above capabilities:

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

$UUUU, $MP, $ALOY, $USAR, $LYSDY (Lynas Rare Earth), $NEO (Toronto Stock Exchange), $ILU, $ARU (ASX)

2. Structural Metallurgy (Niobium, Vanadium, Titanium, Beryllium):

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

3. Computing Power, Perception, and Power Supply (Gallium, Germanium, Graphite, Battery Metals):

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

Taking robotic joints as an example, it is a permanent magnet motor that requires a neodymium processing supply chain:

1. Neo Performance Materials (Toronto Stock Exchange: NEO)

2. $MP

3. $UUUU — processes monazite ore into NdPr oxide

The U.S. government should review the material lists (BOM) of each robotic supply chain one by one, and then invest heavily to ensure processing capacity of raw materials.

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

The United States is highly vulnerable in the physical robot supply chain, and securing domestic metal and midstream processing capacity is crucial for competing with China.

The U.S. must increase investments in critical material supply chains today to maintain a long-term dominant position in the robotics industry.