China Orders Export Restrictions On Chip Materials

China has ordered export restrictions on two elements critical for manufacturing semiconductors and communications equipment, following the latest round of US-led moves to prevent the country from advancing its own chipmaking industry.

The Ministry of Commerce said on Monday that gallium and germanium would be subject to export restrictions to “safeguard national security and interests”.

From 1 August exporters will be obliged to apply to the ministry for permits, and will have to supply information about end users and how the materials will be used.

Approval from China’s cabinet, the State Council, will be required “for the export of items listed in this announcement that have a significant impact on national security”, the ministry said.

Critical materials

Firms found violating the controls could face administrative punishment or even criminal charges, it said.

Gallium nitride is widely used in 5G base stations, military radar systems and increasingly in electric vehicle chargers, while gallium arsenide is used in wireless communications and lasers.

Germanium is widely used in fibre-optic cables, solar panels and LEDs, as well as military thermal imaging cameras.

The controls follow the Netherlands’ latest round of trade restrictions on high-end semiconductor manufacturing tools, which are likely to prevent firms such as ASML from shipping certain equipment to Chinese customers.

Allied export push

China said the latest Dutch plans were “an abuse of export control measures and seriously disrupted free trade and international trade rules”.

The Netherlands and Japan have both introduced previous controls on semiconductor-related equipment under pressure from the US, which announced restrictions affecting its own chip equipment makers last October.

China in May banned the use of memory chips from US firm Micron in “critical national infrastructure” citing security risks that the US commerce department said had “no basis in fact”.

China is the world’s largest producer of gallium and germanium, with more than 95 percent of worldwide production for gallium and 67 percent for germanium.

Trade tensions

It is also the top producer of rare earth elements, with more than 90 percent of the world’s production capacity for the 17 metals essential to modern technologies.

The country introduced an export control law in 2020 and has added items to the list including some rare earth-related items.