China has announced new export controls on gallium and germanium, two important metals used in semiconductor, telecommunications, solar power, and electric vehicle industries.
The new export rules will require Chinese companies to obtain an export license for gallium and germanium metals as well as products containing them starting August 1, 2023, in the name of China’s national security. China is the world’s largest producer of both gallium and germanium, as it has significant reserves of these metals and produces a large proportion of the global supply.
China accounts for about 94% of the world’s gallium production, so its restrictions could have a drastic effect on numerous industries, including semiconductor, LED, and solar power. Meanwhile, such restrictions will inevitably hurt Chinese companies, too. The move by the Chinese government could be a response to sweeping sanctions against the country’s semiconductor and supercomputer sectors by the U.S. implemented last October. Last week the Dutch government announced plans to restrict sales of ASML’s advanced chip-making tools to Chinese companies, a decision that sparked strong opposition from China.
