In an intensifying trade war between China and the United States, Beijing has taken a significant step by imposing export controls on two crucial raw materials essential to the global chipmaking industry. Gallium and germanium, strategic elements used in semiconductors, have become the latest targets in China’s escalating battle for dominance in the semiconductor sector.

The move announced abruptly on Monday, is seen as China’s second major countermeasure against the tech war, following the May sanctions on Micron Technology, one of America’s largest memory chip manufacturers. Industry analysts at Jefferies believe this action is in response to the potential tightening of the US ban on AI chips.

The announcement has sent shockwaves through global supply chains, as companies caught off guard by the restrictions scramble to secure alternative sources of these vital materials. Not only the semiconductor industry but also electric vehicle manufacturers are concerned that curbs on rare earth exports may be the next step in China’s trade retaliation.

The export controls on gallium and germanium products, slated to take effect from August 1, pose a significant threat to the global chipmaking ecosystem. These metals are integral to the production of semiconductors, which are the backbone of various industries, including technology, automotive, telecommunications, and more. With China being a major player in the semiconductor supply chain, disruptions to the availability of these raw materials could reverberate across the global market.

The ongoing trade war between the world’s two largest economies has witnessed a series of retaliatory actions and countermeasures. However, the imposition of export controls on strategic materials crucial to the semiconductor industry marks a significant escalation in tensions. The repercussions of this move could potentially lead to further disruptions in global supply chains, forcing industries to search for alternative sources and further raising concerns about the future of the semiconductor landscape.

As the trade war continues to unfold, all eyes remain on the actions and reactions of both China and the United States, as well as the impact they will have on various sectors heavily reliant on semiconductors and the critical technologies they enable.

Related:

• China Opposes Dutch Restrictions on Semiconductor Equipment Exports
• EU and Japan Strengthen Cooperation on Semiconductors for Defense and Automotive Industries
• Semiconductor Industry Faces Crisis, AI Demand Brings Hope for Recovery

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