The chip war between the US and China accelerates. Beijing has announced an immediate halt to exports to the United States of key materials for the production of semiconductors and defense applications. The block concerns gallium, germanium, antimony and superhard materials. It is the response to Washington’s new restriction the day before on the exports of 140 Chinese companies specialized in the production of components for microchips.
On Monday, Washington expanded the list of Chinese technology companies subject to export restrictions. The measure, which affects 140 companies, including Piotech, SiCarrier and Naura Technology, aims to hinder China’s access to advanced semiconductors and the equipment needed to produce them. This move, justified by the White House as a national security measure, is part of a broader strategy to limit Beijing’s ability to develop technologies related to artificial intelligence and advanced military applications. The new US rules also include controls on 24 types of chip-making equipment and three software used in semiconductor development.
The Chinese response to America’s third crackdown came less than 24 hours later. Beijing has announced an immediate ban on exports to the United States of gallium, germanium and antimony, materials crucial to the semiconductor industry and military applications. A move motivated by the Chinese government as necessary to safeguard national security.
Gallium and germanium are essential for microchips, LEDs and advanced radar systems. China controls a near global monopoly on these materials: 98.8% of refined gallium and 60% of germanium are produced in the People’s Republic. A full embargo could cost the United States $3.4 billion a year, according to the US Geological Survey. Antimony, on the other hand, is essential for defense: used in ammunition, infrared missiles and even night vision glasses. China controls about half of the world’s production, and the collapse of Chinese exports has already caused prices to surge.
The United States has been trying to contain China’s technological rise for years, particularly in the field of advanced semiconductors, which are crucial for artificial intelligence and defense. And for years Beijing has been exploiting its dominant position in some strategic supply chains to fight back. Next steps? China could further limit exports of rare earths and graphite, essential for lithium batteries and other technologies. In turn, Washington could step up tariffs or enact new sanctions against Chinese companies. And with the inauguration of Donald Trump, determined to tighten the tariff policy, the trade and technological war between China and the United States risks deteriorating further.
