China's Export Restrictions on Semiconductor Materials Heighten Fears of Chip Output Shortages

China's Export Controls and Their Impacts on Semiconductor Production

As China imposes stringent export controls on critical semiconductor materials like germanium and gallium, the global supply chain is facing unprecedented challenges. This move, which Beijing defends as protecting its national security and interests, has resulted in prices nearly doubling in Europe over the past year. China, responsible for 98 percent of the world's gallium and 60 percent of germanium, demonstrates its dominance by impacting western technology production.

Significant Price Increases

Germanium prices surged 52 percent since June, reaching $2,280 per kilogramme. Long waiting periods for export approvals, averaging 30 to 80 days, exacerbate supply uncertainties. This creates an unstable market for companies reliant on these materials.

• Beijing's restrictions have led to reduced exports, with shipments halved since controls.
• Industry analysts suggest that China’s actions are retaliatory responses to US-led technology export restrictions.
• Stockpiling practices in China may contribute to the heightened prices and limited overseas availability of germanium.

Global Implications

Continued throttling of exports could severely disrupt key advanced product production, from microprocessors to military equipment. The implications for companies dependent on these vital materials are profound, especially as international tensions linger.