Analysis of the Correlation between Rare Earth Element (REE) Import Trends (HS Code 2846) and the Growth of the National Semiconductor and Electronics Manufacturing Sector: A Strategic Materials Chemistry Study

Abstract

Rare earth elements (REEs) under HS Code 2846 are critical strategic inputs for Indonesia's semiconductor and electronics manufacturing sector (KBLI 26), but heavy import dependence creates vulnerabilities to global supply disruptions and price volatility. This study analyzes the time series correlation between quarterly REE import volumes (kg) and Gross Value Added (GVA) growth using official BPS data from Q1 2021 to Q3 2025 (T=19 observations). Methods employed include Augmented Dickey-Fuller (ADF) stationarity testing, Pearson correlation on first-differenced logarithms, and Vector Autoregression (VAR(1)) modeling with Granger causality and Impulse Response Function (IRF) analysis. Results confirm both variables are I(1) stationary, with strong positive correlation between  and  at  (). The VAR(1) model reveals significant lagged effect (, ), where 1% prior-quarter REE import growth predicts 0.251% current-quarter GVA increase (); IRF peaks at 1-2 quarters. Findings establish REE imports as leading indicator for electronics performance, recommending domestic monazite/zircon processing and HS 2846 localization to enhance material security.