What Will Happen to China’s Gallium and Germanium Ban?

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Starting in August, China will restrict exports of gallium and germanium, two elements essential to semiconductor chip manufacturing.

Because China has a monopoly on supplies of both elements, exporters need special permits to bring them out of the country. The move could hurt various Western tech manufacturers who use these elements to make their products.

The move is reportedly in response to Western restrictions on equipment essential to the manufacture of semiconductor devices.

Among other things, the US CHIPS and Science Act of 2022 could cut exports of high-end microchips and technology to China, impacting China’s high-performance computing capabilities in areas such as defense. Other countries, including Japan and the Netherlands, have also imposed restrictions.

So how important is China’s new regulation, and what impact might it have?

Silicon is the most widely used material in semiconductors and is very abundant. However, germanium and gallium have specific properties that are difficult to reproduce, making them suitable for specific niche applications. They are embedded in countless devices such as smartphones, laptops, solar panels, medical equipment, and defense applications.

Both factors are important for technological progress over the next few years. Germanium is more resistant to cosmic radiation than silicon, making it particularly useful in space technologies such as solar cells.

Some technologies are approaching the physical limits of silicon, and increasing use of germanium is being explored as a way to overcome these limits. It is already used in small amounts in some semiconductors to improve things like electron flow and thermal conductivity.

Gallium oxide chip wafer.Image: Facebook

95% of gallium is used in a material called gallium arsenide, which is used for semiconductor applications with higher performance and lower power consumption than silicon. These are used in things like blue and violet LEDs and microwave devices.

Gallium nitride, on the other hand, is used in semiconductors for components such as electric vehicles, sensors, high-end wireless communications, LEDs, and Blu-ray players. Its use is expected to grow significantly.

Gallium and germanium are both on the European Union and US Important Element Lists. The UK considers gallium to be extremely important to its manufacturing interests, but regards germanium as less important.

China controls about 60% of the germanium supply. This element is obtained by him in two main ways, as a by-product of zinc production and from coal. These account for approximately 75% and 25% of the total supply, respectively.

China has a monopoly on germanium from zinc production. The United States is one of the alternative suppliers, with deposits in Alaska and Tennessee and additional refining capacity in Canada. As it stands, however, the United States is still more than 50% dependent on imported germanium.

Germanium from coal has some drawbacks. Two of the major producers are Russia and Ukraine, and the war has affected supplies from both countries to the West. For example, from 2017 to 2020, Russia supplied 9% of US germanium demand, which is likely to have stopped now.

In response to Chinese regulations, Russia plans to increase germanium production for its domestic market. This could at least ease global demand, if not directly help the West.

Germanium from coal is also at the mercy of the power industry as certain coals rich in the germanium element are burned as an energy source. Moreover, as many countries around the world seek to phase out coal-fired power generation, germanium from coal will become even more difficult to obtain, and supplies may become tight again.

open pit coal mine
The future of coal-derived germanium is uncertain. Photo: Mark Agner (via The Conversation)

For gallium, China accounts for about 80% of the world’s supply, mainly from aluminum production. There is actually no shortage of gallium, but supply was limited by a lack of production capacity even before the new regulations were introduced.

Gallium is also obtained by recycling semiconductor wafers, which are flakes of semiconductors used in electronic circuits. However, once circuits are incorporated into products, the amount of gallium in each is so small that it becomes difficult to recycle.

A 2022 Nature Communications paper said that gallium “is rarely functionally recycled” once it reaches the final product.

The impact of China’s new export regime will depend on many factors, including how strict the regulations actually are and how Western governments and companies respond. As it stands, this regulation will likely increase the price of gallium and germanium and lengthen delivery times.

This could make electronics more expensive and difficult to manufacture by Western companies, which could result in higher prices for consumers. It may also make it more difficult for Western firms to compete with Chinese firms.

Reflecting that the global microchip shortage during the COVID-19 pandemic had a major impact on technology manufacturing, this represents a significant impact on the global economy.

With so many factors involved, it is difficult to predict the long-term effects of control. A stockpile of elements should help to some extent. The US says it has stockpiles of germanium, not gallium.

Western manufacturers may be forced to diversify their supply chains by sourcing components containing the element from countries China is willing to export. This can add cost and complexity.

Another avenue is to increase production from alternative sources. In the past, germanium was obtained from minerals mined in Germany, Latin America, and Africa, so these options may be on the table again. There is potential to invest in research into devices that are less dependent on these important materials, but it will take time to bear fruit.

The move is clearly a major escalation in the technology war between China and the West. The concern is that it could go further. China has a monopoly on supplying all kinds of critical materials known as rare earth metals and other materials needed for the transition to clean energy. Even before hostilities escalated in the past few years, China used its superiority over certain materials as leverage in trade disputes.

So this latest development is alarming to say the least. At a time when the global challenges facing humanity are greater than ever, the rise of new resource nationalism is not everyone’s greatest need.

Gavin DJ Harper, Research Fellow, Birmingham Center for Strategic Elements and Key Materials, University of Birmingham

This article is republished from The Conversation under a Creative Commons license. Please read the original article.

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