China Restricts Exports of 2 Vital Chip-Making Metals

The Chinese government decided to restrict the export of two metals that are vital for the manufacturing of semiconductors and a wide-range of electronics.

As Bloomberg reports(Opens in a new window), export restrictions are being placed on gallium and germanium by China’s Ministry of Commerce from Aug. 1. The reason given is one of safe guarding “national security and interests,” and any company wishing to export either metal or their chemical compounds will need to apply for and be granted a license first.

The ministry also demands details of the companies buying either metal as part of the approval process, suggesting exports will be denied to certain overseas organizations. China is the leading producer of germanium, with Russia and the US a distant second and third. China is also a leading producer of gallium, but so are Japan, South Korea, Russia, and Ukraine.

Gallium is used across a broad range of electronics including solar panels, low-noise microwave preamplifiers in smartphones, LEDs, and the lasers used to read Blu-ray discs, to name but a few. Germanium is used for high-speed integrated circuits, solar panels, fluorescent lamps, and is viewed as a potential replacement for silicon in chips.

Restricting exports of the metals, depending on how strict those restrictions are, is expected to increase the cost of hardware manufacturing and could potentially could lead to a shortage outside of China.

The exports restrictions have been announced as the US is mulling even tighter restrictions to stop AI chips reaching China. The Chinese government decided back in May that Micron chips posed a national security threat and banned their use by many types of company—a move widely viewed as a form of retaliation for the US banning advanced chip-making technology sales to China.