10 Aug 2023 -

China’s export controls stir ‘chip wars’ and global supply chain shifts


China has imposed export restrictions on gallium and germanium, two critical materials used in the production of high-tech devices. Starting August 1, Chinese exporters of gallium, germanium, and certain related chemical compounds must obtain export licenses from MOFCOM before exporting these materials, reports Global Policy Watch. Gallium and germanium are “minor metals” produced as a byproduct during the refining process of other metals, such as zinc and aluminum.

This move has been met with concern by industry leaders, who worry that it could lead to higher prices and shortages of these materials.

China is the world’s leading producer of both gallium and germanium, and the export restrictions could have a significant impact on the global supply chain. Gallium is used in the production of LEDs, lasers, and solar cells, while germanium is used in the production of night vision devices and semiconductor chips.

The announcement of the export restrictions comes amid a growing trade war between the United States and China. The US has imposed a number of restrictions on Chinese technology companies, and China has responded by imposing its own restrictions on US exports.

It is unclear how the export restrictions will impact the global tech industry. Some experts believe that the restrictions will lead to higher prices and shortages of gallium and germanium, while others believe that the industry will be able to find alternative sources of supply.

The export restrictions are a reminder of the importance of diversification in the global tech supply chain. If one country controls a critical material, it can use that control to exert political pressure or disrupt the global economy.

The tech industry needs to find ways to reduce its reliance on any single country for critical materials. This will require cooperation between governments and businesses, as well as investment in new technologies.

To avoid electronics supply-chain disruptions, you may also wish to consult an expert in electronics component supply. With more than three decades of supply-chain expertise, Astute Electronics is ideally placed to work with you on your daily component requirements.

For more help with looking at supply chain options, contact Astute Electronics

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