China’s commerce ministry announced late Monday that the country is restricting the exports of two metals important to the manufacturing of semiconductors.
Under the new regulations, exporters will be required to seek a license to ship some gallium and germanium compounds beginning August 1.
Applications for the export licenses must identify importers and end users and stipulate how these metals will be used, which China stated is for national security purposes.
This move is part of an intensifying global battle for technological supremacy — with China as the world’s largest source of both metals, CNBC reported citing a European Union study on critical raw materials this year.
“This move will have a limited impact on global supply given the targeted scope,” Eurasia Group analysts, Anna Ashton, Xiaomeng Lu and Scott Young wrote in a note.
“It is a shot across the bow intended to remind countries including the United States, Japan, and the Netherlands that China has retaliatory options and to thereby deter them from imposing further restrictions on Chinese access to high-end chips and tools,” they added.
In October, the US introduced measures aimed at cutting off exports of key chips and semiconductor tools to China, while also lobbying key semiconductor-making nations and allies, such as the Netherlands and Japan, to introduce export restrictions of their own.
Gallium is a soft silver metal used to produce compound semiconductor wafers for electronic circuits, semiconductors and light-emitting diodes, while germanium is used in the manufacturing of fiber optics to transfer data and information.
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