The Chinese government is restricting the export of two significant metals — germanium and gallium — which are essential components in the manufacturing of electronic and semiconductor devices. Germanium is essential for the production of fiber optic items and night-vision goggles, while gallium is fundamental for semiconductors. The Critical Raw Materials Alliance, a business group, states that China is the source of 60% of worldwide production of germanium and 80% of gallium. Researchers say that the effect of the limitations will be minimal, as there are other sources of the metals and alternatives can be used.
China is limiting the export of two metals that are essential for the production of electronics and semiconductors, as the tech conflict with the U.S. and Europe intensifies. Germanium and gallium are the two metals being focused on. But, what is their importance and how significant are they?
Since 2019, the U.S. and China have been involved in a technology trade dispute that is continually intensifying. The Americans have tried to block access to essential tech components and semiconductors through blacklisting and sweeping export limitations. This has made them the key focus of the ongoing rivalry between the two giants. Although Beijing has not responded in a drastic manner, in May they announced that U.S. chip company Micron posed a "major security threat." Currently, the Chinese are leaning on materials and metals used in electronics and semiconductors, which they have some advantage in. The country's commerce ministry declared on Monday that exporting gallium and germanium must have a permit, basing the policy on national security principles.
Germanium and gallium are not discovered in nature; instead they are generally created as a result of refining other metals. Germanium, a silvery-white metal, is usually a result of the smelting of zinc, whereas the soft, silvery metal gallium is generally a consequence of processing bauxite and zinc ores.
Germanium has a number of uses, such as in solar products and fiber optics. The metal has the ability to pass through infrared radiation, making it suitable for military equipment like night-vision goggles. It is also employed in the production of solar panels which have a space application. Gallium, meanwhile, is used for creating gallium arsenide, a chemical compound that is essential for making radio frequency chips used in mobile phones and satellite communication, among other components for semiconductors.
Approximately sixty percent of global germanium output comes from China, as cited by the Critical Raw Materials Alliance, an organization associated with the industry. The production of gallium arsenide is arduous, and few firms worldwide can achieve it. The CRM Alliance is aware of one in Europe and two more in Japan and China.
Eurasia Group noted in a Monday note that China's latest measures are nothing more than a "warning shot," rather than a "death blow." While these rules necessitate Chinese exporters to acquire a license, they do not bar exports to certain countries or users explicitly. Moreover, the U.S. and Europe do not rely heavily on these metals—in 2022, the U.S. imported only $5 million of gallium metal and $220 million of gallium arsenide, with Germany's intake at $60 million of germanium and the EU, $130 million of the same. Additional countries such as Belgium, Canada, Germany, Japan, and Ukraine can also create these metals, and there exist potential alternatives too. However, Eurasia Group noted that China's actions will have a "limited impact" since their scope is narrow and their intention is simply to remind the U.S., Japan, and the Netherlands of Beijing's retaliatory options and thus prevent further restrictions on Chinese access to chips and tools.
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