China Seeks Global Tech Control via Issuing Stern Restrictions on Exporting Semiconductor-Making Materials

China manufactures nearly 80 percent of global gallium and germanium products used in making chips that are critical in AI developments.

The Xi Jinping-led government has once again pushed the People’s Republic of China to arise against the enemy’s gunfire after being left with few moves to play. Notably, the government of China has issued a stern warning against the exportation of gallium and germanium products, which are mostly used in the manufacture of semiconductor chips. On July 3, the Chinese Ministry of Commerce issued a joint statement with the General Administration of Customs requiring all gallium and germanium metal exports to have a government license.

Citing national security interests, the Chinese government noted that there will be no excess exportation of gallium and germanium starting from August 1. Reportedly, the government has put in place punitive actions against persons caught going against the issued orders.

Some of the metal products highlighted in the recent export restrictions include gallium antimonide, gallium arsenide, gallium metal, gallium nitride, gallium oxide, gallium phosphide, gallium selenide, and indium gallium arsenide.

Others are germanium products including germanium dioxide, germanium epitaxial growth substrate, germanium ingot, germanium metal, germanium tetrachloride, and zinc germanium phosphide.

China Checkmates US Sanctions on AI Chips

Undeniably, the Chinese government has outwitted the United States government in taking control of futuristic technologies by restricting the exportation of key materials. Moreover, a 2023 report from the European Commission and the European Association of Critical Raw Materials Alliance (CRMA), shows that the Republic of China is home to over 80 percent of global gallium supply. The Chinese tech experts are now working on scaling the production of their modern semiconductor chips to remain a major global hub for tech companies in the future.

Notably, Chinese tech companies have suffered a low supply of American emerging technologies since the Trump administration began issuing sanctions. The situation has over the years worsened after the Biden administration issued similar sanctions and pushed its allies including Japan to cut China off the semiconductor supply.

Since the Artificial Intelligence (AI) boom, related stocks and products have skyrocketed amid heavy speculations. For instance, Nvidia Corp. (NASDAQ: NVDA) saw its market capitalization rally towards $1 trillion earlier this year following the demand vs supply choke. According to the latest stock market data, NVDA shares have rallied about 19 percent YTD to trade around $424 on Tuesday. Interestingly, nearly 50 Wall Street analysts expect the NVDA stock market to rally further in the coming future with an average rating of Buy.

The response from the White House on the matter is expected to escalate or calm down the situation after Chinese officials earlier requested nations to work together on technology for humanity’s future. Nonetheless, the ongoing war between Russia and Ukraine has complicated the relationship between the West and China.

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Steve Muchoki

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