TAIPEI/SINGAPORE – Taiwan’s TSMC is exploring alternatives to rare-earth components in factory equipment, three people familiar with the matter said, aiming to reduce the risk that Beijing’s export controls could disrupt operations at plants that make the world’s most advanced chips.

The move, reported for the first time, underscores how China’s grip on rare earths has become a vulnerability for the global semiconductor industry after the country last year put certain rare-earth materials, magnets and related processing technology under export controls, requiring licenses.

Rare-earth magnets are commonly used in motors that power moving parts in industrial equipment, including machinery found in highly automated factories such as those operated by TSMC.…