America is losing the race to China in Robotics and Humanoids.
Software/AI is only half the battle.
China has a kill switch over US robotic hardware supply chains, due to the fact that:
America cannot make the materials required to manufacture humanoids at scale at a reasonable cost.
If China pulls the "kill switch," the entire US robotic buildout slows, as China has dominating control over the "body" (actuators, reducers, metallurgy) and the raw materials required to build humanoids.
As a result, US robotics companies have contracted of Chinese manufacturers for all the humanoids parts to build ones like Optimus at a cheap enough price. However, they try and keep "Brain" in the US.
If you look at all the top suppliers for robotic Actuation/Motion. None are from America:
- Leaderdrive (China): Harmonic Reducers
- Harmonic Drive (Japan): Harmonic Reducers
- Nabtesco (Japan): RV Reducers
- Sanhua Intelligent (China): Linear Actuator Assemblies
- Shuanghuan Driveline (China): RV Reducers / Gears
- Shenzhen Inovance (China): Servo Systems / Ball Screws
This is due to one major issue:
China currently controls nearly 70% of global rare-earth mining.
More critically, it commands 85% to 90% of global refining and separation capacity, and controls over 90% of finished rare earth magnet manufacturing.
So now, the major threat of this is: There's a structural overhang of Chinese export controls on America's robotics program.
Beijing has already demonstrated a willingness to weaponize this monopoly recently with other countries like Japan.
To break the reliance on the robotics and Optimus Supply Chains and ensure the robotic revolution can continue domestically.
Western capital needs to flow into companies reconstructing the Rare Earths Ecosystem for Robotics for:
- upstream mining
- midstream separation/metallization
- downstream magnet manufacturing.
If the global humanoid fleet scales to 1 billion units by 2050, a baseline scenario in Morgan Stanley's modeling, it will require an estimated 400,000 tons of Neodymium, 80,000 tons of Dysprosium, and 16,000 tons of Terbium. This represents a demand shock equivalent to 15% of total known global Neodymium reserves, 25% of global Dysprosium reserves, and 30% of global Terbium reserves.
Basically, in the other words, China has the control over US robotic hardware supply chains.
Today, is the time in history where America needs to invest to secure their own supply chain, to ensure America wins the Robotics Race against China.
And that is in Rare Earths, in order to produce robotic humanoid hardware at a competitive price to that of Chinese counterparties.
Here's what the US government needs to look out for:
- The Magnet Metals (For Frameless Torque Motors):
- Neodymium (Nd) & Praseodymium (Pr): These "light" rare earths are the core ingredients for NdFeB magnets
- Dysprosium (Dy) & Terbium (Tb): Rare earths that are alloyed into the magnets
- Samarium (Sm) & Cobalt (Co): Used to create SmCo magnets
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Boron (B) & Iron (Fe): Critical stabilizing mineral that makes up about 1% of the NdFeB magnet's weight
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**Structural Metallurgy (For Harmonic Reducers & Planetary Roller Screws)
- Titanium (Ti), Vanadium (V), & Molybdenum (Mo): gears in harmonic reducers and the threaded shafts of planetary roller screws
- Niobium (Nb), Chromium (Cr), Nickel (Ni), & Manganese (Mn): **These are vital micro-alloying elements added to structural steel to increase toughness, prevent corrosion, and drastically reduce the weight of the robotic joints
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Cerium (Ce) & Lanthanum (La): Prevents the robot's gears from suffering premature failure.
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**Compute, Perception, and Power (The Brain, Eyes, and Battery)
- Gallium (Ga) & Germanium (Ge):** Essential for the advanced semiconductors, LiDAR systems, and high-frequency communication chips
- Lithium (Li), Graphite (C), & Copper: A single full-size humanoid robot requires roughly 2 kilograms of lithium, 3 kilograms of graphite, and up to 6.5 kilograms of copper
And now, the list of America's most important companies to ensure these capabilities:
- Magnet Metals (Nd, Pr, Dy, Tb, Sm, Gd):
$UUUU - Processes monazite sand into high-purity Neodymium
$MP - Extracting bastnäsite at Mountain Pass and vertically integrating into domestic NdFeB magnet manufacturing.
$ALOY - Converting heavy rare earth oxides into defense-grade alloys and high-temperature metals like Samarium and Gadolinium
$USAR - Process heavy rare earth elements and manufacture sintered NdFeB magnets
$LYSDY (Lynas Rare Earths Limited) - Only commercial producer of separated heavy rare earth elements outside of China.
$NEO (TSX): They are the only Western company commercially producing the actual NdFeB magnetic powders and alloys at scale right now.
$ILU (rare earths refinery): rare earths refinery for Australia
$ARU (ASX): "Ore-to-oxide" NdPr facility
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Structural Metallurgy (Niobium, Vanadium, Titanium, Beryllium)
$ATI - Dominant US producer of high-performance titanium and specialty alloys required for robotic joints.
$CRS - US supplier of specialty structural alloys, including the high-strength steels, titanium, and magnetic
$FCX - World's largest producer of Molybdenum, which is strictly necessary for the structural steel in planetary roller screws.
$NB - Critical pure-play company developing the Elk Creek project in Nebraska, aimed at supplying domestic Niobium, Scandium, and Titanium
$MTRN - Major global processor of Beryllium
$LGO - Leading publicly traded processors of Vanadium
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Compute, Perception, and Power (Gallium, Germanium, Graphite, Battery Metals)
$BMM - Onshore supply and processing for like Germanium and Gallium
$VNP - Gallium, Germanium, and Indium for advanced sensors and electronics
$TECK - Most significant producer of Germanium outside of China
$ALB - Lithium extraction
$EAF - High-purity Graphite for battery anodes
$ALTM - Western lithium required to supply the batteries
$SYR - Balama mine for Graphite
$FCX - Humanoid requires up to 6.5 kilograms of copper
$AW1 (ASX): Advancing the West Desert project in Utah, for domestic geological sources for high-grade Gallium and Indium
For example: robotic joints is a permanent magnet motor.
Which requires neodymium processing supply chains:
1. Neo Performance Materials - TSX: NEO
2. $MP
3. $UUUU - surprisingly processing monazite concentrate into NdPr oxide.
The US government should one-by-one into each robotic supply chain BOM, then heavily invest to securing processing for the raw materials.
As currently, the actuation systems required to build a humanoid comprise and the global infrastructure required to manufacture these components is overwhelmingly concentrated in China.
America is highly vulnerable in the physical robotics supply chain, and securing domestic metals and midstream processing is critical to competing with China.
The United States must invest more into critical material supply chains today, in order to preserve long term dominance in the robotics industry.