China will curb the export of some critical metals widely used in the semiconductor industry from August 2023, its commerce ministry announced on Monday.  

The move is part of a strategic retaliation by the country as the US considers restricting exports of artificial intelligence chips to China. The US Department of Commerce announced in late June that it would halt the shipment of chips made by Micron, AMD, NVIDIA and other US chipmakers. 

China’s new measures will require exporters to seek licences and permissions to ship gallium and germanium products. The country claims that these measures will protect national security and interests.  

“China has hit the American trade restrictions where it hurts,” Peter Arkell, chairman of the Global Mining Association of China, told Reuters.  

According to the European industry association Critical Raw Materials Alliance, China contributes 60% to the global germanium supply and produces 80% of the world’s gallium. These metals are used to manufacture high-speed computer chips, night vision devices and other defence sector infrastructure, and the renewables industry.  

Despite being the top few importers of China’s gallium and germanium, the US and the Netherlands announced on 29 June that they would restrict chipmaking equipment sales as part of the countries’ effort to prevent their technology being used to strengthen China’s military. 

There are fears in the metals industry that China will extend the export restrictions to rare earths, reports Reuters. “It is a fantasy to suggest that another country can replace China in the short or medium term,” Arkell told the agency.  

The measures in China will come into effect from 1 August and apply to eight gallium-related products: gallium antimonide, gallium arsenide, indium gallium arsenide, gallium metal, gallium nitride, gallium oxide, gallium phosphide and gallium selenide. 

These also extend to six germanium products: germanium dioxide, germanium epitaxial growth substrate, germanium ingot, germanium metal, germanium tetrachloride and zinc germanium phosphide.