Trade War: China Implements Export Controls On Key Metals Used For Chips

China has implemented export limits on two metals utilized in the manufacturing of computer chips and other valuable technological devices, according to an announcement by the country’s Ministry of Commerce on Monday.

The export restrictions on gallium, germanium and their corresponding chemical compounds will officially take effect at the beginning of August, according to the announcement.  The controls may increase expenses for hardware producers and exacerbate geopolitical tensions surrounding the competition for groundbreaking computing technology, according to Bloomberg.

In addition to computer chips, manufacturers use gallium and germanium for a vast array of devices including solar panels, lasers and night vision goggles, according to Bloomberg. China is the primary producer of these metals based on its portion of worldwide mining and exporters will require a license to export them, according to the announcement.

The U.S. also relies on China for medical supply chains and the CEO of U.S. defense contractor Raytheon Technologies told the Financial Times it would be impossible to break all ties with China.

President Joe Biden’s administration is weighing limits on U.S. exports of artificial intelligence chips to China, The Wall Street Journal reported. Similarly, they would require exporters to have a license.

This move would follow measures the Biden administration implemented in October to curb U.S. chip sales to China that could benefit the Chinese military, according to the WSJ.

The China Academy of Engineering Physics (CAEP), the country’s primary nuclear weapons research institute, obtained American chips despite the export restrictions, the WSJ reported in January. CAEP has purchased the technology at least 12 times over the past two and a half years.