2023-07-04 03:49:35 ET
China has responded to recent chip export restrictions with its own set of export controls on some gallium and germanium products, which will likely lead to further disruption in the global supply chain.
The Ministry of Commerce said the export curbs, which are aimed to "safeguard national security and interests", will be effective from August 1.
Companies that do not apply for export licenses for the products listed will be held criminally responsible.
China is the world's biggest gallium producer and is responsible for around 60% of the world's total germanium production, according to the Critical Raw Materials Alliance.
Gallium is used in semiconductors needed for phone chargers and electric vehicles, while germanium is used in fiber optic cables, solar cells and infrared technology.
"The take-away for EU and allies is clear: de-risking on critical resources is urgent even if that means higher costs and/or engaging in unpopular pursuits of mining and refining at home," said Thorsten Benner, co-founder, Global Public Policy Institute.
U.S. semiconductor wafer manufacturer AXT ( AXTI ) said its Chinese unit will immediately seek permits to export gallium and germanium substrate products.
The move comes in the wake of the U.S. planning fresh restrictions on exports to China. The U.S. could potentially curb Chinese companies' access to cloud-computing services, WSJ reported .
If implemented, the new rule would require companies such as Amazon ( AMZN ) and Microsoft ( MSFT ) to seek U.S. government approval before providing cloud-computing services that use advanced AI chips to Chinese customers.
This would be in addition to new restrictions under consideration as the U.S. expands its export control policy implemented in October 2022.
The Netherlands recently announced a new rule to curb exports of certain advanced chipmaking equipment to China, with the U.S. expected to follow soon.
More on the chip war
- Chip war heats up as U.S. mulls new curbs on exports to China
- Double whammy: Dutch curb chipmaking gear sales to China
- Nvidia: Potential AI Chip Rules May Impact Investment Case
- Micron: Better Than Expected - But A New Geopolitical Battle Is Brewing
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China strikes back with export curbs on gallium, germanium used for chipmaking