Yttrium is a chemically active, silvery-white metal primarily obtained through the calciothermic reduction of yttrium fluoride. It oxidizes easily in air, losing its metallic luster. In industrial applications, yttrium is not always used as metallic yttrium; more often, it enters the downstream rare earth supply chain in the form of compounds such as yttrium oxide (Y₂O₃).
Yttrium was also the first rare earth element ever discovered. Thanks to its outstanding physical and chemical properties, it has become a critical additive in industrial production worldwide, silently underpinning modern manufacturing.
What truly thrust yttrium into the global spotlight is the high-end sector's deep dependence on it - and China's control over that supply.
Rare earth yttrium is mainly distributed in countries such as China, Russia, the United States, and Australia, with about 40% of the reserves concentrated in China. Today, China not only holds the world's largest rare earth reserves, but more critically, it controls over 90% of global rare earth refining and separation capacity.
Affected by China's rare earth export controls, overseas yttrium oxide prices have continued to soar since 2025. According to Asian Metal, the price of yttrium oxide surged from $7.9/kg in January 2025 to $441/kg by May 2026 - a 55-fold increase.
The top three industries in Japan by yttrium oxide consumption are electronic ceramics, phosphors and displays, and the semiconductor industry - all core pillar industries. With yttrium oxide prices skyrocketing, Japanese manufacturers face rising costs that ultimately erode the competitiveness of their products in the global market.
As of now, overseas spot prices for yttrium oxide have surged 3.4 times compared to the beginning of the year. For Japanese yttria-stabilized zirconia (YSZ) producers, production costs have spiraled completely out of control, forcing them to pass on the pressure through steep price hikes.
When upstream critical strategic raw materials are cut off, downstream high-end manufacturing capacity can be wiped out entirely.
Aerospace sector
Beyond its use in dental restoration, YSZ ceramic materials - with their low thermal conductivity, high melting point, and excellent chemical stability - have become one of the top choices for the ceramic layer in thermal barrier coatings (TBCs). For the past 30 years, YSZ has been the absolute workhorse of TBCs, widely used in the engines of advanced fighter jets such as the F-22, F-35, and J-20, as well as in commercial aero engines from GE, Rolls-Royce, and Pratt & Whitney. The Aerospace Industries Association (AIA) of the United States states that yttrium is vital for the world's most advanced jet engines. Dak Hardwick, the AIA's vice president for international affairs, revealed: "Our supply chain currently relies heavily on imports from China - a dependency that is driving up costs amid worsening shortages."
Semiconductor equipment
Among the hundreds of steps in chip manufacturing, plasma etching is one of the most brutal. The high melting point and thermal stability of Y₂O₃ enable it to maintain excellent protective performance over long periods in plasma etching environments, making it one of the most widely used materials for plasma etching protection. The biggest advantage of Y₂O₃ is that it reacts slowly in fluorine-based plasmas, preserving the stability of the coating surface, which gives it strong prospects for use in etching equipment for 8-inch and larger wafers.
MLCC sector
Multilayer ceramic capacitors (MLCCs) primarily use barium titanate (BaTiO₃) as the dielectric material. However, BaTiO₃ suffers from inherent drawbacks such as large temperature drift, high dielectric loss, and poor voltage endurance, making it essential to dope the material with trace amounts of rare earth oxides for lattice modification. According to analysis by China Galaxy Securities, yttrium oxide is the doping material with the largest consumption in the MLCC powder preparation process, while dysprosium and terbium are key additive raw materials for producing MLCCs used in automotive-grade and AI high-voltage scenarios. Following China's implementation of rare earth export controls, Japanese and South Korean companies have found it significantly harder to procure these rare earth materials.
Optics and lasers
Currently, yttrium is most widely used in crystalline materials, such as yttrium aluminum garnet (Y₃Al₅O₁₂, YAG), yttrium vanadate (YVO₄) single crystals, and yttrium silicate (YSiO) crystals. Among them, YAG - a synthetic, colorless, transparent crystal with high hardness, a high melting point, and stable physical and chemical properties - has become the most widely used laser crystal material today.
Beyond military applications, yttrium iron garnet (YIG) can be used to fabricate key passive devices in the terahertz frequency band, helping solve problems of interference and one-way transmission for 6G high-frequency signals. While not strictly essential components, they can still influence the performance of 6G networks.
Why is yttrium indispensable?
According to Japanese companies that use yttrium-based materials: "It is very difficult to substitute with other materials, and there is no clear trend yet toward reducing procurement." Additional data shows that about 65% of yttrium-containing materials or yttrium oxide products imported by the United States are manufactured in Japan.
Back to the original question: Is yttrium indispensable for high-end manufacturing?
Technically irreplaceable. In advanced ceramics applications, yttrium oxide plays multiple roles as a "stabilizer," "dopant," and "sintering aid." This is partly due to the unique properties of yttrium oxide as a heavy rare earth, and partly because it is the most cost-effective heavy rare earth material. Moreover, adding heavy rare earth elements to ceramic powders is meant to impart special functionalities to the ceramics.
Absolute control over the supply chain. The yttrium rare earth industry chain has formed a peculiar "hourglass" structure: upstream resources are geographically diverse, and downstream applications are extremely broad, but the critical "processing" step in the middle is tightly held in one place. This represents a structural, strategic supply chain power.
The depth of the chain reaction. Yttrium is no ordinary bulk metal. It is an indispensable critical material embedded in extraordinarily high-end industrial scenarios - semiconductor manufacturing processes, high-temperature engine coatings, aerospace components, electronics, and high-performance industrial applications.