Beijing (AFP) – Beijing said Tuesday it would restrict exports to the United States of some key components in making semiconductors after Washington announced curbs targeting China’s ability to make advanced chips. Among the materials banned from export are metals gallium, antimony, and germanium, according to Beijing’s commerce ministry, which cited “national security” concerns. Exports of graphite, another key component, will also be subject to “stricter reviews of end-users and end-uses,” the ministry stated.
“To safeguard national security interests and fulfill international obligations such as non-proliferation, China has decided to strengthen export controls on relevant dual-use items to the United States,” Beijing said. “Any organization or individual in any country or region violating the relevant regulations will be held accountable according to the law,” it added. Washington announced Monday restrictions on sales to 140 companies, including Chinese chip firms Piotech and SiCarrier, expanding efforts to curb exports of state-of-the-art chips to China. These can be used in advanced weapons systems and artificial intelligence.
The new US rules also include controls on two dozen types of chip-making equipment and three kinds of software tools for developing or producing semiconductors. Beijing swiftly vowed to defend its interests. On Tuesday, China added that the United States had “politicized and weaponized economic, trade, and technological issues” as it unveiled its own export curbs. The moves also restrict the exports of “dual-use items to United States military users or for military purposes,” Beijing stated.
China accounts for 94 percent of the world’s production of gallium, which is used in integrated circuits, LEDs, and photovoltaic panels, according to a report by the European Union published this year. For germanium, essential for fiber optics and infrared, China makes up 83 percent of production. Beijing last year already tightened restrictions on exporters of the metals, requiring them to provide information on the final recipient and details about their end use. However, Tuesday’s rules now ban them outright. Additionally, China previously restricted exports of certain types of graphite, key to making batteries for electric vehicles.
“The move is clearly a retaliatory strike at the US,” Dylan Loh, an assistant professor at Singapore’s Nanyang Technological University, told AFP. “It drives home an important point which is that China is not completely passive (and) there are some cards it can play and hit the US with as well with regards to chips,” Loh added. These “back and forth curbs” could create supply chain disruption as well as inflationary pressures, should they affect trade for third parties, said Chong Ja Ian, an associate professor of political science from the National University of Singapore.
While the metals play critical roles in high-tech industries, they are upstream in the supply chain, meaning the immediate impact on production “is limited,” Brady Wang, associate director at technology market research firm Counterpoint, told AFP. “As the US-China trade tensions have persisted for some time, many intermediary manufacturers in the supply chain have been stockpiling these materials,” Wang added.
Multiple Chinese trade associations released similarly worded statements Tuesday urging members to seek local alternatives to US chips. The Internet Society of China called on companies to “be cautious when procuring US chips, seek to expand cooperation with chip companies in other countries and regions, and actively use chips produced and manufactured in China by domestic and foreign enterprises.” The China Association of Automobile Manufacturers accused Washington of having “arbitrarily amended the control rules, seriously affecting the stable supply of US chip products.”
“The Chinese auto industry’s trust and confidence in the procurement of US chip products is being shaken, and US auto chip products are no longer reliable and safe,” the association stated. The US’s Semiconductor Industry Association president John Neuffer said such claims over reliability and safety “are simply inaccurate.” He added that the group is evaluating the impact of the latest controls by Washington and Beijing, urging “both governments to avoid further escalation.”
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