China has in his hands the world production of chips and batteries thanks to the gallium

On December 2, one of the most aggressive Chinese sanctions packages of those who have deployed USA so far entered into force. And is that the government led by Joe Biden included 140 more companies on your blacklist. These prohibitions are aimed as Chinese companies that design and produce The lithography equipment involved in the manufacture of advanced semiconductors, hence the impact they are presumably having on the Chinese chips industry is deep.

As expected, China soon react. Just one day later the government led by Xi Jinping announced the prohibition of export of critical minerals to the US. Among them are three essential chemical elements for the semiconductor industry, as well as some materials that are characterized by their extreme hardness, and that, therefore, can be used for military applications, such as gallium, Germanio and antimony.

According to Japan, restrictions will affect the supply chains of chips and batteries

China currently produces 59.2% of Germanio, 48% of the antimony and nothing less than 98.8% of the gallium. “This measure entails a considerable escalation of the tension to which supply chains are already subjected. It is difficult to access some raw materials,” Jack Bedder holdsco -founder of the Project Blue consultant. “It is logical that China responds to the growing restrictions of current and imminent US authorities with their own restrictions on these strategic minerals,” Peter Arkell points outPresident of the Global Chinese Mining Association. “It is a commercial war without winners.”

Several Japanese officials and executives linked to the semiconductor industry are aligned with Jack Bedder’s thesis. According to Financial Timesthese experts are warning of the US governments, Japan and their allies that the restrictions imposed by China on Galio’s export and other strategic raw materials will affect deeply to the supply chains of semiconductors and batteries.

However, this is not all. Japanese officials suspect that the Chinese government could force them to inform them about all the products that contain Gallic exported by Japan to the US. Otherwise the administration of Xi Jinping could even more harden the measures that have caused that Japanese Gauling imports from China have fallen no less than 85% between August 2023 and the same month of 2024.

Japanese companies are the ones that most Gallic, Germanio and Grafito consume. More than US, European, Taiwanese or South Korean companies. If the Beijing Government hardens its control over the Gallium the electric motors of Tesla cars from Japan, the lasers of Gallium Arseniuro used by Broadcom or some of the chips integrated in Apple’s iPhone could be affected by China’s export licenses. This situation reminds us of something important: no industrialized country can remain outside the economic and commercial war that the US and China hold.

More information | Financial Times

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