Not Just EVs, India's TV Makers Could Face Supply Jolt From China's Rare Earth Magnet Curbs

The potential supply disruptions from China's curbs on rare earth magnet exports are not just limited to electric vehicles. The television industry is now also raising a red flag, with manufacturers warning of an impending shortage of this critical component used in making smart TV speakers.

"As the country remains heavily reliant on Chinese imports for rare earth magnets, the restrictions pose a significant challenge," said Arjun Bajaj, director, Videotex International Pvt., which manufacturers TVs for Lloyd, BPL, Hyundai, Akai, Realme, Toshiba, Hisense and 20 other brands.

Suppliers have just two months worth of stocks, which could derail production schedules ahead of the upcoming festive season, he added.

This crisis could compromise not just availability but also the performance of smart TVs. Companies are scrambling to find alternatives to de-risk the situation. They are turning to ferrite magnets—but warn that these substitutes cannot match the efficiency or quality of rare earth magnets.

"We've started working on alternative options to avoid production loss," said Avneet Singh Marwah, chief executive officer, Super Plastronics Pvt., the exclusive brand licensee of Thomson and Kodak in India. "But without rare earth magnets, the quality and efficiency of audio could suffer. The substitutes don’t give same sound output and it’s not as compact. But in case of shortage or no supply, we will be left with no choice but to shift."

Bajaj concurred. "We are working closely with our suppliers to ensure adequate stock for the upcoming season. Simultaneously, we are actively exploring alternatives like ferrite magnets to avoid any production hit."

Rare earth magnets, particularly neodymium magnets, account for about 2% of the bill of materials of TV speakers, with India importing its entire requirement from China.

“Inability to procure these magnets may halt manufacturing lines in Noida, Chennai, and Pune. OEMs may switch to importing finished speakers, reversing the gains made under 'Make in India',” Electronic Industries Association of India said in a whitepaper presented to the government.

Beijing's decision in April to restrict its exports of rare earth materials have pushed up prices of China-origin magnets by about 15-20%, according to industry executives. Even if imports resume, they expect costs to remain elevated. However, it is likely to have minimal impact on the sticker price of TVs. The use of alternative materials would also have a nominal impact due to lower cost. Manufacturers, meanwhile, have underscored the urgent need for India to localise its supply chain to reduce dependency on China.