On July 3, China published a notice restricting the export of certain key metals used in the production of advanced semiconductors and solar panels.1 Issued by the Ministry of Commerce, the directive targeted two types of critical metals: gallium and germanium,2 both on the country’s national strategic mineral list. China produces over 80 percent of gallium and 68 percent of germanium and their alloys worldwide. However, these metals differ from the rare earth metals whose global reserves are concentrated in China. In the case of gallium and germanium, other countries can turn to recycling and their own reserves in the short run, as the Chinese export restrictions start to bite.
In the long run, other producing countries are likely to increase their outputs as demand pushes up prices. Thus, China may not enjoy a long-term international advantage from the new export ban, as global supplies diversify, although domestic semiconductor firms might be incentivized to produce more advanced chips. Gallium is critical in the making of certain types of high-speed and energy-efficient chips.
Although silicon-based chips are used in most of the world’s semiconductor devices and integrated circuits, the physical properties of silicon materials limit their use in optoelectronics and high-frequency, high-powered devices. Gallium and other materials are well suited for so-called later generation semiconductors, which can overcome some of these challenges and excel in harsher conditions. It is used to produce high-performance microwave and millimeter-wave devices and light-emitting devices, which makes it promising for defense, aviation, aerospace, oil exploration and optical storage purposes. Gallium nitride can reduce energy loss by more than 50 percent and greatly reduce the volume of equipment required, compared to silicon-made components, making it s
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