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China is restricting exports of gallium and germanium, two metals essential to semiconductor manufacturing, the Commerce Department said in a statement late July, escalating a technology trade war over access to microchips with Europe and the United States.
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China restricts exports of two metals essential to semiconductor production, the Commerce Department said late Mondayescalating a technology trade war with Europe and the United States over access to microchips.
These new rules – imposed for reasons of national security – will require exporters to apply for a license to ship some gallium and germanium compounds from August 1, China’s Commerce Ministry said. said. Applications for these export licenses must identify importers and end users and determine how these metals will be used.
The move is part of an increasing global battle for technological supremacy — with China the world’s largest source of both metals, according to a European Union study on critical raw materials this year.
Shares of Chinese germanium producers surged on Tuesday. During the midday trading break, Yunnan Lincang Xinyuan Germanium Industrial rose to the 10% limit in Shenzhen as Yunnan Chihong Zinc & Germanium gained previous gains, but was still up 7.5%. Both outperformed the 0.1% gain for the CSI 300 index of China’s largest A-share listings.
In October, the US introduced sweeping rules to halt the export of key chips and semiconductor tools to China. The measures are believed to cripple China’s ambitions to boost its domestic tech industries. The US has also lobbied key chip-producing countries and allies, such as the Netherlands and Japan, to introduce their own export restrictions.
The Netherlands responded on Friday with new export restrictions on advanced semiconductor equipment. This will effectively prevent ASML from exporting to China. But these latest Dutch curbs aren’t specifically aimed at ASML, one of the world’s leading semiconductor companies.
Some countries are also trying to secure their own supply chains and build their domestic chip industries, focusing on areas where they are traditionally strong. Last week, a fund backed by the Japanese government proposed a 903.9 billion yen ($6.3 billion) acquisition of semiconductor materials giant JSR.
Semiconductors are some of the most important technology products. They are everywhere from smartphones to cars and refrigerators, and are also seen as key to military applications and advancing artificial intelligence.
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