China has announced restrictions on the export of gallium, germanium, and certain compounds in response to export bans imposed by the US and Japan on advanced chips and chip-making equipment.Starting August 1, Chinese chemical suppliers will need government licenses to export 38 products, including gallium nitride (GaN) and germanium dioxide (GeO2), used in chip manufacturing, communications equipment, and defense applications.China is the leading global source of gallium and germanium, accounting for 94% and 83% of their supplies, respectively.The move is seen as an effort to slow down the development of US and Japanese chipmakers and provide an opportunity for Chinese players to catch up.A gallium oxide chip wafer.

(Photo Internet reproduction)Chinese authorities maintain that the export controls are in line with international practices and aim to ensure the security and stability of global industrial and supply chains.The restrictions are expected to impact the prices of gallium and germanium, potentially affecting the competitiveness of US and Japanese chipmakers.However, some analysts suggest that the bans will have limited global supply implications, as alternative sources or domestic production can be explored at higher costs.China’s export controls remind the US, Japan, and the Netherlands that retaliatory options are available if further restrictions are imposed.