- The Chinese Ministry of Commerce has imposed export restrictions on gallium and germanium, citing national security concerns.
- Because of the importance of these basic chemicals in semiconductor manufacture and other industries, the move has sparked worry.
China’s Restriction
- Specific Licencing Requirement: To restrict the export of gallium and germanium, export operators must obtain a specific licence.
- The application process requires operators to supply information on importers, end-users, final usage, and the original export contract. Unauthorised exportation will be considered a violation, resulting in administrative penalties and even criminal proceedings.
Concerns and Importance
- Gallium plays an important role in the production of semiconductor wafers, integrated circuits, mobile communications, satellite communications, LEDs, automotives, lighting, and sensor applications.
- Germanium’s role: Due to its qualities such as heat resistance and energy conversion efficiency, Germanium is utilised in fiber-optic cables, infrared imaging devices, optical devices, and solar cells.
- Import Dependence: Because China accounts for 80% of gallium production and 60% of germanium production, countries that rely heavily on imports, such as the European Commission and India, are concerned.
International Reactions
- United States: The United States opposes China’s export limits and intends to consult with partners and allies on the matter. The emphasis is on diversifying supply networks and strengthening resilience.
- The European Commission expresses alarm about the development, highlighting concerns about its security implications.
- Background: For national security considerations, the United States, Japan, and the Netherlands have imposed export control measures aimed at advanced computing chips and semiconductor manufacturing capabilities.
China’s Point of View:
- China’s Foreign Ministry spokesperson emphasises that the export limitations are not aimed at any one country and emphasises China’s commitment to secure and stable global supply chains.
- Countermeasures: According to some Chinese officials, the export limitations are only the beginning, and China may escalate its countermeasures if restrictions become more severe in the future.
Impact on India
- Short-Term Disruption in India: Due to the disruption of immediate supply chains and rising pricing, India may see short-term disruptions in its sectors.
- Long-Term Impact: The long-term impact on India’s chip-making plans and industries will be determined by factors such as alternative supply sources, domestic semiconductor manufacturing capabilities, and strategic collaborations such as the India-US Initiative on Critical and Emerging Technology (iCET).
- India has an opportunity: India can investigate waste recovery from zinc and alumina manufacturing for gallium and germanium, as well as other substitutes such as indium and silicon, while focusing on domestic semiconductor production.
@the end
- Because of their important importance in different industries, particularly semiconductor fabrication, China’s export curbs on gallium and germanium have sparked global alarm.
- Other countries’ replies reflect the geopolitical backdrop of the ongoing ‘chip war.’
Source: https://www.thehindu.com/news/international/explained-why-is-china-limiting-exports-of-raw-materials/article67058415.ece#:~:text=It%20said%20that%20the%20controls,be%20enforced%20from%20August%201.