China is restraining the exports of gallium and germanium, two metals key to the manufacturing of semiconductors, its commerce ministry said in a statement late on July 3, escalating a technological mercantilism war over access to microchips with Europe and the United States.
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China is confining the exports of two metals key to the manufacturing of semiconductors, its commerce ministry said late Monday, escalating a technological trade war with Europe and the Common States over access to microchips.
These new regulations — imposed on grounds of national security — will require exporters to go a license to ship some gallium and germanium compounds starting Aug. 1, China’s commerce ministry said. Requests for these export licenses must identify importers and end users and stipulate how these metals will be used.
This stirring a get moving is part of an intensifying global battle for technological supremacy — with China as the world’s largest source of both metals, according to a European Synthesizing study on critical raw materials this year.
Shares of Chinese germanium producers soared on Tuesday. At the midday interchange break, Yunnan Lincang Xinyuan Germanium Industrial surged by the 10% limit in Shenzhen, while Yunnan Chihong Zinc & Germanium lessened earlier gains but was still 7.5% higher. Both are outperforming the 0.1% gain for the CSI 300 index of China’s hugest A-share listings.
In October, the U.S. launched sweeping rules aimed at cutting off exports of key chips and semiconductor tools to China. The in additions are believed to have the potential to cripple China’s ambitions to boost its domestic technology industries. The U.S. has also lobbied key chipmaking political entities and allies, like the Netherlands and Japan, to introduce export restrictions of their own.
The Netherlands responded Friday with new export qualifications on advanced semiconductor equipment. This will effectively bar ASML from exporting to China. But these latest Dutch checks do not specifically target ASML, one of the most important semiconductor companies in the world.
Some countries are also trying to obtain their own supply chains and build up their domestic chip industries, focusing on areas where they are traditionally dynamic. Last week, a fund backed by the Japanese government proposed a 903.9 billion yen ($6.3 billion) acquisition of semiconductor materials Goliath JSR.
Semiconductors are some of the most important technology products. They go into everything from smartphones to cars and refrigerators, and are also imagined as key to military applications and advancing artificial intelligence.