The EU, under these new rules, will force companies to source inputs from at least three different suppliers. Specifically, no more than 40% of an input may come from one supplier, so mathematically you need at least three suppliers. These suppliers also may not come from the same country, so three different suppliers, three different countries.
It’s certainly an interesting way to reduce reliance on Chinese suppliers, even if it might not be possible to actually find more than three suppliers and three different countries for certain materials (heavy rare earths and frontier AI chips are two that come to mind). However, it will still help diversify supply chains in the event of another shock, like a Hormuz blockade.
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The EU, under these new rules, will force companies to source inputs from at least three different suppliers. Specifically, no more than 40% of an input may come from one supplier, so mathematically you need at least three suppliers. These suppliers also may not come from the same country, so three different suppliers, three different countries.
It’s certainly an interesting way to reduce reliance on Chinese suppliers, even if it might not be possible to actually find more than three suppliers and three different countries for certain materials (heavy rare earths and frontier AI chips are two that come to mind). However, it will still help diversify supply chains in the event of another shock, like a Hormuz blockade.