China makes nearly 80 percent of the world’s gallium and germanium products used to make chips that are critical to AI developments.
The government led by Xi Jinping has once again pushed the People’s Republic of China to stand up to enemy fire after leaving it with few moves to play. Notably, the government of China has issued a strict warning against the export of gallium and germanium products, which are mostly used in the manufacture of semiconductor chips. On July 3, China’s Ministry of Commerce issued a joint statement with the General Administration of Customs requiring all exports of gallium and germanium metals to obtain a government license.
Citing national security interests, the Chinese government male That there will be no excessive export of gallium and germanium from August 1. It is reported that the government has taken punitive measures against people who are caught against the orders issued.
Some of the metal products highlighted in recent export restrictions include gallium antimonide, gallium arsenide, gallium metal, gallium nitride, gallium oxide, gallium phosphide, gallium selenide, and indium gallium arsenide.
Others are germanium products including germanium dioxide, germanium growth substrate, germanium ingot, germanium metal, germanium tetrachloride, and germanium-zinc phosphide.
China imposes US sanctions on artificial intelligence chips
It is undeniable that the Chinese government has overtaken the US government in controlling future technologies by restricting the export of key materials. Moreover, the 2023 report by the European Commission and the European Union Critical Raw Materials Alliance (CRMA) shows that the Republic of China is home to more than 80 percent of the global gallium supply. Chinese technology experts are now expanding the production of their modern semiconductor chips to remain a major global hub for technology companies in the future.
Notably, Chinese tech companies have suffered from a reduced supply of emerging US technologies since the Trump administration began issuing sanctions. The situation has worsened over the years after the Biden administration issued similar sanctions and pushed its allies including Japan to cut off China’s semiconductor supply.
Since the artificial intelligence (AI) boom, stocks and related products have skyrocketed amid great speculation. For example, Nvidia Corp. Inc. (NASDAQ: NVDA) shot its market capitalization nearly $1 trillion earlier this year after choking demand against supply. According to the latest stock market data, NVDA shares are up 19 percent year-to-date to trade around $424 on Tuesday. Interestingly, nearly 50 Wall Street analysts expect the NVDA stock market to rise further in the near future with an average rating of Buy.
The White House’s response on the matter is expected to escalate or de-escalate the situation after Chinese officials earlier asked the countries to work together on technology for the future of humanity. However, the ongoing war between Russia and Ukraine has complicated the relationship between the West and China.
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