As of August 1, China is restricting exports of two key raw materials for chips. The country is by far the number one producer of germanium and gallium. The move follows a decision by the Dutch cabinet to limit exports of chip machines to China.
Last week it became clear that the cabinet will restrict exports of advanced chip machines to China from September. This step mainly affects ASML in Weldoven. This result may rely on little understanding from the Asian country.
Now, less than a week later, Beijing is announcing that it will also introduce export restrictions. In concrete terms, Chinese companies wishing to sell germanium and gallium overseas must first obtain approval. They don’t always get that permission. The Chinese government has said that this restriction is necessary for the country’s security.
The Netherlands imports a lot of gallium
China controls two-thirds of world germanium production. In vacancy, the Chinese hold almost the entire market. The latter ingredient is also widely used in the Netherlands. We are the world’s third largest importer, after Japan and Germany. The European Commission criticized the Chinese decision and did not believe it had anything to do with the country’s security.
China and the West have long been engaged in a global technological war. Chip manufacturing, among others, plays an important role in this. Today chips are used in many products such as cars, washing machines, laptops and telephones.
Car manufacturers were forced to close factories
During the Corona pandemic, there was a huge shortage of chips. As a result, many car manufacturers had to temporarily close their factories. Other products were also affected. It made it clear, for example, how vulnerable Europe is when it comes to chips.
Microprocessors are used not only in things in and around the home, but also in defense equipment such as missiles and drones. This was one of the main reasons why the US urged the Cabinet to restrict ASML’s chip machines.
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