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BEIJING, July 4 (TMTPost) —— The Chinese government announced on Monday evening that it decided to implement export controls on gallium and germanium-related items from August 1 to safeguard national security and interests.

U.S. semiconductor wafer maker AXT, Inc. a multinational materials company, quickly responded by saying that its Chinese subsidiary will immediately start applying for permission to export gallium and germanium products. “We are actively pursuing the necessary permits and are working to minimize any potential disruption to our customers,” said Morris Young, the Chief Executive Officer.

A Chinese germanium producer revealed that they received a large number of inquiries from U.S., Japanese and European buyers after the restrictions were introduced, and bidding prices soared overnight. Those buyers want to buy and stockpile some products before the export controls take effect and expect that it could take up to two months for them to get an export license.

According to the announcement, gallium-related items such as gallium metal, gallium nitride, gallium oxide, gallium phosphide, etc., and germanium-related items such as germanium metal, zone refined ingots, zinc germanium phosphide and germanium dioxide, shall not be exported without permission from August 1. Exporters should follow the relevant regulations for export licensing procedures, and apply to the Ministry of Commerce through the provincial commerce department. The Ministry of Commerce will review applications from the date of receipt of the export application documents in conjunction with the relevant departments and will decide to grant or deny permission within the statutory time limit. The export of items with a significant impact on national security will be reported to the State Council for approval by the Ministry of Commerce in conjunction with the relevant departments.

According to public information, gallium metal is mainly used for semiconductor and photoelectric materials, solar cells, alloys, medical devices and magnetic materials in China. Among them, the semiconductor industry has become the largest consumer of gallium, accounting for 80% of the total consumption. With the rapid development of the gallium downstream application industry, especially the semiconductor industry and solar cell industry, the demand for gallium metal will also grow steadily in the future.

Germanium is an important semiconductor material with wide and important applications in semiconductors, aerospace measurement and control, radiation detection for nuclear physics, fiber-optic communication, infrared optics, solar cells, chemical catalysts and biomedicine.

Bai Ming, a researcher with the Chinese Academy of International Trade and Economic Cooperation under the Ministry of Commerce, said in a telephone interview with the National Business Daily that the implementation of export control on gallium and germanium-related items is largely related to national security. "We are acting according to the law based on the announcement itself. On the other hand, many countries have introduced export control-related ordinances,” said Bai. Experts interviewed by the Global Times believe that through the export licensing system, China can have information on the end users of these key metal exports and how these materials are used to avoid the risk of jeopardizing national security and interests. In addition, China's export control may mean a reciprocal measure in the context of the U.S. crackdown on Chinese high technology.

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