China Imposes Export Ban on Key Materials for Chip Production to the U.S.
Nikkei Asia – China has announced it will tighten regulations on the export of key materials for chip production, including gallium, germanium, and other critical substances, in response to the U.S.'s new export controls on Chinese companies.
On December 3, China’s Ministry of Commerce announced that materials such as gallium, germanium, antimony, and graphite would be banned from export to the U.S. in order to “protect national security and interests.” These new measures are set to take effect immediately, raising concerns about potential disruptions to global supply chains.
The materials on the ban list are considered "dual-use," meaning they can be used for both civilian and military applications. Gallium and graphite are particularly important for chip production, electric vehicles, and other high-tech applications. These materials were highlighted in a 2021 U.S. government report on global supply chains, which noted that the concentration of production in China posed risks to global supply stability.
This move by China follows closely on the heels of the U.S. government’s announcement of new export controls, which included placing 140 Chinese companies, including major chip equipment manufacturers, on a “blacklist.” These U.S. measures are seen as an effort to prevent China from accessing advanced chip technologies for military purposes.
China’s Ministry of Commerce clarified that not only will materials like gallium and germanium be affected, but all dual-use materials and products exported for military purposes to the U.S. will also face stricter controls. Last month, the Ministry published a detailed list of dual-use materials, metals, and products subject to export restrictions, including key materials such as tungsten, magnesium, and titanium.
China argues that the U.S. export controls violate international norms and harm the interests of Chinese businesses, creating significant disruptions to global supply chain stability. In a related development, several major industrial associations in China, including the China Association of Automobile Manufacturers and the China Internet Association, have strongly criticized the U.S. measures, urging Chinese businesses to exercise caution when importing U.S. chips. They argue that U.S. chips are now unreliable due to the arbitrary changes in export regulations.
In the U.S., Commerce Secretary Gina Raimondo stated that the latest export controls were the strongest actions taken so far to “prevent China from using the most advanced chip technologies for military purposes.” This marks the third round of export controls targeting Chinese companies in the past three years, which are expected to have a significant impact on Chinese chip equipment suppliers such as Piotech and SiCarrier Technology. The new rules also restrict the export of high-bandwidth memory (HBM) chips – crucial for advanced applications like AI training – to China, along with 24 types of chip production equipment and 3 software tools.
Meanwhile, China continues to push forward with its plans to develop and dominate future advanced technologies. In May, China announced the creation of a national semiconductor investment fund worth $47.5 billion, the largest such investment in the sector to date.
Summary:
The Chinese government has decided to ban the export of key materials for chip production, such as gallium and germanium, to the U.S., amidst escalating tensions between the world’s two largest economies. This move is seen as a response to new U.S. export controls targeting Chinese companies. China emphasizes that these measures are necessary to protect national security and interests, while also expressing strong opposition to U.S. actions, which they claim disrupt global supply chains.
