The logic behind China’s restriction on export of vital semiconductor-making materials
Gallium (Ga) and Germanium (Ge) are important raw materials in the semiconductor industry, primarily used in high-end chips. For instance, third generation semiconductor Gallium Nitride is widely used among high power application industry , such as military radar, data center, EV etc
China has always been a major exporter of gallium and germanium. For your information , 90% of the world's gallium and 68% of the world's germanium are produced from China.
Although the US has the world’s largest reserves of Germanium , they are not producing it in a large scale. In fact, it's not that these two elements are exclusively available in China , but the most important factor is cost of production.
Gallium and germanium are primarily extracted as a side product of Aluminium smelting process, in other words, they are the “ production waste”.
Gallium and germanium are primarily extracted as a side product of Aluminium smelting process, in other words, they are the “ production waste”.
China alone houses around 60% of the world’s aluminium smelting industry, they have a lot of “by products” which can be refined into Germanium and Gallium, and this significantly lower the production costs for gallium and germanium, if were to compare to the methods of extraction of these raw elements from the ores.
As the current situation of aluminium smelting industry is in a state of oversupply, it is not viable and not feasible for the other countries to set up a huge aluminium supply chain just to produce Gallium and Germanium.
In my humble opinion, the main purpose of Chinese government to impose such export restriction is to upscale the “negotiating power” , as US Treasury secretary Janet Yellen will be visiting Beijing few days later. Apart from that , the policy also serves as a retaliation to Japan and Netherland , which imposed restriction measures to sell the semiconductor wafer fabrication equipment.
In my humble opinion, the main purpose of Chinese government to impose such export restriction is to upscale the “negotiating power” , as US Treasury secretary Janet Yellen will be visiting Beijing few days later. Apart from that , the policy also serves as a retaliation to Japan and Netherland , which imposed restriction measures to sell the semiconductor wafer fabrication equipment.
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hartamas : good article
72878051 : The impact is far-reaching, at least affecting his production and costs.