China Slaps Export Curbs on Chipmaking Metals in Tech War with the US and Europe

China make public on Monday that it would impose export controls on two metals essential for the manufacture of semiconductors, gallium, and germanium. The move is the latest escalation in the country's ongoing tech war with the United States and Europe.

Gallium and germanium are rare metals used in a wide range of electronic devices, including semiconductors, solar panels, and LED lights. China is the world's leading producer of both metals, accounting for about 80% of global gallium production and 60% of global germanium production.

The export controls will require Chinese exporters to obtain a license from the government before shipping gallium and germanium to certain countries. The government needs to release a list of the countries affected by the controls, but it will likely include the United States, Europe, and Japan.

The Chinese government said that the export controls are necessary to protect the country's national security. However, analysts believe the move is also intended to retaliate against the United States and Europe, which have imposed their export controls on Chinese technology companies in recent years.

The export controls are likely to impact the global semiconductor industry significantly. Gallium and germanium are essential for producing high-end chips, and the export controls could lead to shortages and higher prices for these components. This could disrupt the production of a wide range of electronic devices, from smartphones to computers to cars.

The export controls are also likely to escalate further the tech war between China and the United States. The United States has warned China that it will take further action if Beijing does not lift the controls. This could lead to a series of tit-for-tat measures that could damage the global economy.

The export controls indicate that the tech war between China and the United States is entering a new and more dangerous phase. The two countries increasingly use their economic and technological power to compete for global dominance. This competition is likely to continue for years to come, and it could profoundly impact the global economy and the future of technology.

In addition to the export controls, China has taken other steps to strengthen its control over the semiconductor industry. In 2020, the government announced a plan to invest $1.4 trillion in the semiconductor industry over the next five years. The government has also created a new chipmaking research institute and financially supports domestic chipmakers.

These moves are part of China's long-term strategy to become self-sufficient in semiconductor production. The country is currently heavily reliant on imported chips, and the government sees this as a vulnerability. China hopes to reduce its reliance on foreign suppliers and gain a strategic advantage in the global tech race by strengthening its control over the semiconductor industry.

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