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Chinese germanium makers jump after China restricts exports of chip minerals

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Shares of Chinese germanium producers hit the daily upward limit early Tuesday on news that Beijing imposed export controls on gallium and germanium, two minerals critical to the production of semiconductors.

China-listed Yunnan Lincang Xinyuan Germanium Industrial
002428,
+10.00%

and state-run Yunnan Chihong Zinc & Germanium
600497,
+7.07%

rose 10% in early trading, outperforming the Shenzhen Composite Index’s 0.3%
399106,
+0.33%

decline and the Shanghai Composite Index’s
SHCOMP,
+0.07%

0.1% fall.

On Monday, China’s Ministry of Commerce said gallium, germanium and more than three dozen related metals and other materials would be subject to export controls starting Aug. 1, a move it said was aimed at safeguarding the country’s national security and interests.

This development comes as the U.S.-China technological rivalry intensifies, after the Biden administration in October banned China from importing high-end chips and in January restricted China from buying lithography machines needed to produce high-performance chips.

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According to the U.S. Geological Survey, China is a significant producer of gallium, and about 53% of the U.S.’s gallium was imported from China between 2018 and 2021. However, imports decreased substantially in 2019 after the U.S. imposed higher tariffs on Chinese gallium.

Industrial experts said Monday’s measure by Beijing will immediately affect the semiconductor industry and the production of high-performance chips.



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