China curbs exports of key computer chip materials

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By Annabelle Liang and Natalie Sherman Business Reporters

2 hours ago

Image source, Getty Images

The Chinese government is tightening its controls on exports of two main materials used to make computer chips.

From next month, special licenses will be required to export gallium and germanium from China, which is the world’s largest producer of the metal.

This is in response to Washington’s efforts to limit China’s access to some advanced microprocessors.

The announcement comes just days before US Treasury Secretary Janet Yellen visits Beijing.

On Monday, China’s Ministry of Commerce said the restrictions were necessary to “protect national security and interests”.

Silver metals are used in semiconductors, communications and military equipment. They are also essential materials in products such as solar panels.

Semiconductors, which power everything from cellphones to military equipment, are at the center of a bitter dispute between the world’s two largest economies.

The United States has taken steps to restrict China’s access to technology it fears could be used for military purposes, such as chips used in supercomputing and artificial intelligence.

In October, Washington announced that it would require licenses for companies exporting chips to China using US tools or software, no matter where in the world they are made.

Countries including the Netherlands and Japan have joined the effort.

This followed plans to restrict its exports of “more advanced” microchip technology, which the Netherlands announced earlier this year.

The controls are expected to affect Dutch chip equipment maker ASML, a major player in the global chip supply chain.

The measures, announced in March, will affect 23 types of semiconductor manufacturing equipment.

China has often called the United States a “technological hegemon” in response to Washington’s export controls.

In recent months, Beijing has imposed restrictions on US companies linked to the US military, such as the airline Lockheed Martin.

US Treasury Secretary Janet Yellen, who is due on a four-day visit to China from Thursday, warned against severing economic ties between Washington and Beijing.

“I think we win and China gains from as open trade and investment as possible, and it would be disastrous for us to try to separate from China,” she said during her congressional appearances last month.

Yellen will be the second senior US official to visit the country this year.

In June, US Secretary of State Antony Blinken held talks with Chinese President Xi Jinping in Beijing, resuming high-level contacts between the two rival superpowers.

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