China's restrictions on rare earth exports are raising alarms across the global automotive industry, with the German Association of the Automotive Industry (VDA) warning of potential production halts. This development is a major concern for Taiwan's screw industry, a key supplier to German automakers.

Taiwanese screw manufacturers fear a significant loss of orders as German carmakers, particularly those with factories in China, increasingly source fasteners locally. The shift could jeopardize Germany's long-standing position as Taiwan's second-largest screw export market.

Industry experts emphasized that the shortage of rare earths could significantly impact the production of crucial automotive components, including wiper motors and ABS sensors. The concern extends beyond Germany, with auto industry groups in the US and India, including giants such as GM, Toyota, Volkswagen, and Hyundai, also signaling potential factory shutdowns within weeks if supply disruptions continue.

As a downstream supplier to Germany, any downturn there will hit Taiwan even harder, according to participants in Taiwan's screw market. Yung-Yu Tsai, Chairman of Taiwan Industrial Fasteners Institute, also predicted a global depression.