China imposes strict export restrictions on semiconductor-making materials in an attempt to gain global tech control.

The government led by Xi Jinping has once again urged the People’s Republic of China to stand up against the enemy’s attacks, as they have limited options left. Specifically, the Chinese government has issued a strong warning against the export of gallium and germanium products, which are predominantly used in the production of semiconductor chips. On July 3, the Chinese Ministry of Commerce and the General Administration of Customs jointly released a statement, stating that all exports of gallium and germanium metals must be accompanied by a government license.

Citing national security concerns, the Chinese government has declared that there will be no excessive export of gallium and germanium starting from August 1. It has been reported that punitive measures have been implemented against those who violate these orders.

The recent export restrictions target various metal products, including gallium antimonide, gallium arsenide, gallium metal, gallium nitride, gallium oxide, gallium phosphide, gallium selenide, and indium gallium arsenide. Germanium products such as germanium dioxide, germanium epitaxial growth substrate, germanium ingot, germanium metal, germanium tetrachloride, and zinc germanium phosphide are also included.

China Checkmates US Sanctions on AI Chips

Undoubtedly, the Chinese government has outmaneuvered the United States government in gaining control over future technologies by restricting the export of key materials. Furthermore, a 2023 report from the European Commission and the European Association of Critical Raw Materials Alliance (CRMA) reveals that China is responsible for over 80 percent of global gallium supply. Chinese technology experts are now focused on expanding the production of their advanced semiconductor chips to maintain their position as a major global hub for tech companies in the future.

Chinese tech companies have been facing a shortage of emerging American technologies due to sanctions imposed by the Trump administration. The situation has worsened over the years, as the Biden administration implemented similar sanctions and urged its allies, including Japan, to cut off semiconductor supplies to China.

Since the boom of Artificial Intelligence (AI), related stocks and products have experienced significant growth amidst intense speculation. For example, Nvidia Corp. (NASDAQ: NVDA) saw its market capitalization approach $1 trillion earlier this year due to high demand and limited supply. According to the latest stock market data, NVDA shares have risen approximately 19 percent year-to-date, trading around $424 on Tuesday. Interestingly, nearly 50 Wall Street analysts anticipate further growth in the NVDA stock market in the near future, with an average rating of Buy.

The response from the White House regarding this matter is expected to either escalate or ease the situation, as Chinese officials previously called for cooperation among nations in the pursuit of technological advancements for the benefit of humanity’s future. However, the ongoing conflict between Russia and Ukraine has complicated the relationship between the West and China.

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