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China is restricting the exports of two metals key to the manufacturing of semiconductors, its commerce ministry said, a warning to Europe and the United States in their escalating technological trade war over access to microchips.
These new regulations — imposed on grounds of national security — will require exporters to seek a license to ship some gallium and germanium compounds starting August 1, China’s commerce ministry said. Applications for these export licenses must identify importers and end users and stipulate how these metals will be used.
This move is part of an intensifying global battle for technological supremacy — with China as the world’s largest source of both metals, according to a European Union study on critical raw materials this year. It also comes just as US Treasury Secretary Janet Yellen is preparing to visit China later this week.
“This move will have a limited impact on global supply given the targeted scope,” Eurasia Group analysts, Anna Ashton, Xiaomeng Lu and Scott Young wrote in a note.
“It is a shot across the bow intended to remind countries including the United States, Japan, and the Netherlands that China has retaliatory options and to thereby deter them from imposing further restrictions on Chinese access to high-end chips and tools,” they added, pointing to the lack of outright bans for specific countries or end-users.
Semiconductor space looks extraordinarily volatile, says Citi’s Chris Danely
Shares of Chinese germanium producers soared yesterday in anticipation of rising prices for the raw materials, which now face at least a short-term supply disruption.
At the midday trading break, Yunnan Lincang Xinyuan Germanium Industrial surged by the 10 percent limit in Shenzhen, while Yunnan Chihong Zinc & Germanium pared earlier gains but was still 7,5 percent higher. Both are outperforming the 0,1 percent gain for the CSI 300 index of China’s largest A-share listings. — CNBC.
Online Reporter