On the evening of July 3, the Ministry of Commerce of China and the General Administration of Customs of China issued an announcement stating that in order to safeguard national security and interests, with the approval of the State Council, it was decided to implement export controls on items related to gallium and germanium. The announcement will come into effect on August 1, 2023.
Both gallium and germanium are important rare metals, widely used in semiconductor materials, new energy and other fields. Among them, gallium is called "the new food of the semiconductor industry" and is widely used in photovoltaics, magnetic materials, medical treatment, chemical industry, especially wireless communication, LED and other fields. As an important second-generation semiconductor material, gallium arsenide is currently the most mature , One of the compound semiconductor materials with the largest production volume.
Restrictions on the export of gallium and germanium-related products by China could have significant impacts on the global semiconductor industry, as these materials are vital components of various electronic devices, including chips. The impacts could include the following:
1. Supply chain disruptions: Since China is a significant producer and exporter of these materials, restrictions could lead to shortages in the supply chain. Manufacturers that rely on these materials to produce electronic components and devices may face challenges in obtaining them, which could disrupt their production processes.
2. Increased prices: The limited supply of gallium and germanium-related products could lead to increased prices and higher manufacturing costs for electronic devices, including chips. This might eventually result in higher prices for consumers.
3. Reduced innovation: The restrictions could hamper innovation in the semiconductor industry, as these materials are critical for research and development of new technologies. Companies might find it more challenging to progress and innovate due to limitations in accessing essential components.
4. Search for alternatives: The semiconductor industry may be forced to explore alternative materials to meet their needs or invest in developing new technologies that do not rely on gallium and germanium-related items. This process might lead to delays in the rollout of new products or increased research and development costs.
5. Shift in production location: Manufacturers might consider relocating their production facilities to countries where the supply of these materials is not restricted. This could result in a redistribution of resources, affecting jobs and economies in various locations.
However, it is essential to note that the exact impacts will depend on the extent of the restrictions, the ability of the industry to adapt, and the development of alternative materials or technologies to mitigate these challenges.