China exports of gallium and germanium surged before restrictions took effect in August, report shows
- Both gallium and germanium are key to the production of semiconductors and other electronics
- Beijing’s move to ‘safeguard national security’ was seen as retaliation against US and its allies for imposing chip restrictions on China
China’s exports of gallium and germanium, important materials used in semiconductor manufacturing, increased more than 10 per cent in July from a month earlier, as buyers ramped up purchases ahead of export controls imposed by Beijing in August.
In July, exports of gallium, germanium and related products reached US$121 million, up 12.1 per cent from July and 22.7 per cent from the same period last year, according to a report from Chinese chip industry portal Ijiewei on Wednesday, citing data from Chinese customs.
Both gallium and germanium are key to the production of semiconductors and other electronics, with gallium used in power devices for electric vehicles and high-speed switching circuits, while germanium is used in fibre optic systems, infrared optics, solar cells and light-emitting diodes.
China’s commerce ministry and customs administration announced the export controls in early July, requiring that anyone selling these critical metals and related products outside China would have to submit an application and obtain government approval from August 1.
Chinese controls on gallium to have ripple effects on country’s exporters
Beijing said the move, widely seen as retaliation against the US and its allies for imposing chip restrictions on China, was necessary to safeguard “national security and interests”.
China’s restrictions on exports of the materials have fuelled concerns about supply shortages, leading to stockpiling. China is the world’s largest producer of the two elements, with more than 95 per cent of the global gallium output and 67 per cent of germanium production.
In the first seven months of the year, the total value of gallium and germanium exports increased 17.3 per cent to US$696 million. The largest five export markets – South Korea, Japan, India, the United States and Taiwan – have a combined share of 65.8 per cent, according to the same data.
Between January and July, exports to South Korea, home to the world’s two biggest memory chip makers, Samsung Electronics and SK Hynix, surged by 122 per cent year on year to US$209 million.
Exports to the United States, which does not produce gallium domestically, rose 60.2 per cent year on year to US$49.2 million during the same period. Between 2018 and 2021, 53 per cent of US imports came from China, followed by Germany and Japan at 13 per cent each, Ukraine at 5 per cent and others at 16 per cent, according to the US Geological Survey.
Russian and Austrian imports from China also rose sharply, up more than 1.1 and 22 times year-on-year to US$23.2 million and US$13.6 million, respectively.
Last year, the total value of gallium and germanium exports exceeded 1 billion yuan, up 7 per cent from 2021.
