China restricts exports of key materials used to make computer chips

Hong Kong, July 4 The Chinese government has tightened controls over the exports of two key materials used to make computer chips, ahead of the Beijing trip of US Treasury Secretary Janet Yellen.

China’s Commerce Ministry said it would control exports of eight gallium products and six germanium products from August 1 to protect its national security and interests.

The move, according to the BBC, comes in the wake of Washington's efforts to curb Chinese access to some advanced microprocessors.

The metals are used in semiconductor, communications and military equipment. They are also key materials in products like solar panels, the report mentioned.

Meanwhile, US semiconductor wafer maker AXT said it would seek permits to keep exporting gallium and germanium substrate products from China.

“We are actively pursuing the necessary permits and are working to minimise any potential disruption to our customers,” said Morris Young, AXT CEO.

According to the South China Morning Post, the latest controls mark the latest salvo in an escalating war over access to hi-tech microchips between China and the US.

Jefferies analysts said in a note that China controlled 80 per cent of global output of the two materials.

The controls are also likely a response to a potential US tightening of an AI chip ban, according to analysts.

In 2022, top importers of China’s gallium products were Japan, Germany and the Netherlands.