In a chip war twist, China will restrict exports of the niche metals gallium and germanium and certain of their compounds in retaliation against US and Japan export bans on sending advanced chips and chip-making equipment to China.
Beginning August 1, Chinese chemical suppliers must apply for government licenses to export 38 products including gallium nitride (GaN) and germanium dioxide (GeO2), China’s Ministry of Commerce said in a statement on July 3.
The metals are used in chipmaking, communications equipment and various defense items. Gallium is used in compound semiconductors, which when combined with various other elements are often used to improve transmission speed and efficiency in mobile phone screens, solar panels and radars.
Germanium is used in fiberoptic communication cables, night-vision goggles and the solar cells that are used to power many satellites. US imports of gallium metal and gallium arsenide wafers in 2022 were valued at only about US$225 million, according to US trade data.
China is by far the world’s top source of both metals, accounting for 94% of gallium supply and 83% of germanium, according to a European Union study released this year.
Some analysts have already estimated the impact of China’s bans will be limited as the US and Japan can import the materials from other countries or produce them domestically, although at considerably higher costs.
Chinese commentators said China’s export controls aim at slowing the pace of development of US and Japanese chipmakers, a bid to create the time and space for Chinese players to catch up in the critical race to forge ever smaller chip sizes.
“China is always committed to keeping the global industrial and supply chains secure and stable, and has always implemented fair, reasonable and non-discriminatory export control measures,” Chinese Foreign Ministry spokesperson Mao Ning said in a media briefing on Tuesday.
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