Editor, CNBC Indonesia
Tech
Wednesday, 05/07/2023 21:20 WIB
Pictured: Chinese and US flags flutter near the Bund, ahead of a US trade delegation meeting with China in Shanghai, China July 30, 2019. REUTERS/Aly Song
Jakarta, CNBC Indonesia – China enacts a new policy in the technology ‘war’ against the United States (US). The policy will limit exports of two important metals for electronics and semiconductor manufacturing.
The metals in question are germanium and gallium. What’s that? Quoted from CNBC InternationalWednesday (5/7/2023), germanium and gallium are metals that are not formed from natural processes.
Both are produced by human intervention, using other metals. Germanium is a silver-white metal produced from zinc.
Meanwhile, gallium, which is milder in nature, is produced from bauxite and zinc ore.
Germanium has many uses, including in solar products and in fiber optics. This metal is transparent to infrared radiation and can be used to support military equipment such as night-vision goggles.
Gallium is used to make radio frequency chips in cell phones and communications satellites. This component is also a key material for producing semiconductors.
China produces 60% germanium and 80% gallium, according to data from the Critical Raw Materials Alliance. The production of gallium is very complex, so only a few companies produce it.
The policy of limiting the export of germanium and gallium from China will have an impact on the technology industry worldwide. Indeed, China did not ban exports as a whole.
According to the Chinese Minister of Commerce, this export restriction regulation requires exporters to hold a special license if they want to send the two metals abroad.
“This is a warning from China, but will not bring ‘death’ to the industry,” said Eurasia Group.
“This new rule only requires exporters to take care of a special license. There is no mention of specific restrictions for exports to certain countries,” he added.
In 2022, the US imported gallium metal worth US$ 5 million and US$ 220 million of components derived from gallium.
The demand for germanium is higher. The US imported the metal worth US$ 60 million in 2022. Meanwhile, the European Union secured US$ 130 million worth of germanium throughout 2022, according to data from S&P Global Market Intelligence.
Actually, there are several other countries that produce this key metal. Belgium, Canada, Germany, Japan and Ukraine, can produce germanium. Meanwhile, Japan, South Korea, Ukraine, Russia and Germany can produce gallium.
However, China’s large production scale means that the production budget can be reduced to a lower cost.
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(fab/fab)
2023-07-05 14:20:00
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