China announced on Monday that it would implement new limitations on exporting two vital metals crucial for producing semiconductors and other electronic components. This move intensifies the ongoing technology trade dispute between China and the United States.
Starting from August 1, exporters will require a permit to ship gallium and germanium, along with associated chemical compounds, out of China, according to the Ministry of Commerce and the General Administration of Customs.
Gallium is an essential component of compound semiconductors used in electronic devices. Gallium nitride, specifically, finds application in lasers and various other fields, and its use in power semiconductors for electric vehicles is expected to grow.
The utilization of gallium compounds aids in minimizing power loss, prompting companies like Nidec and Renesas Electronics from Japan to explore the incorporation of gallium nitride substrates in a jointly developed electric vehicle component.
China currently accounts for 98 percent of global gallium production, as the U.S. Geological Survey reported. Beijing’s imposition of restrictions on gallium exports aligns with the country’s export control law, enacted in late 2020, which allows authorities to prohibit the shipment of controlled items to specific overseas companies under the pretext of national security concerns.
Chinese authorities have utilized this law to limit the export of encryption technology and semiconductors for data leak prevention.
These restrictions on gallium exports are a response to export curbs placed on China by the United States and other nations. The U.S., as The Wall Street Journal reported, is contemplating stricter trade restrictions on semiconductors destined for China, particularly those utilized in artificial intelligence applications.
Manufacturers unable to procure gallium or related products from China may face limited alternatives, potentially resulting in increased costs for the metal and impeding the adoption of cutting-edge technologies.
