China Restricts Key Chipmaking Metal Exports in Tech War with U.S.

China will impose export curbs on two critical metals used in the manufacturing of semiconductors, the country’s commerce ministry announced late Monday, in retaliation for the United States and European Union’s restrictions on chip exports to China.

Starting on August 1, exporters of specific gallium and germanium compounds — which are essential to parts of the semiconductor, telecommunications, and electric vehicle (EV) industries — will be needed to get “special permission from the state” before exporting.

The Chinese government stated that the action was done “to protect national security and interests.”

China is by far the world’s largest producer of gallium and a prominent producer and exporter of germanium, according to the U.S. Geological Survey, thus this move is part of a wider struggle for technological supremacy on a worldwide scale.

In October, the U.S. enacted sweeping regulations aimed at preventing China’s imports of essential semiconductor chips and tools. The regulations are seen as potentially devastating to China’s efforts to develop its homegrown technological sectors. The U.S. has also encouraged major chip-producing nations and allies like the Netherlands and Japan to implement their own export restrictions.

On Friday, the Netherlands introduced more restrictions on the export of advanced semiconductor equipment. Consequently, ASML will be unable to sell any products in China. However, ASML, a global leader in semiconductor manufacturing, is not a direct target of the new Dutch regulations.