China to tighten control on exports of AI chip-making materials

The Chinese government has announced that it plans to control the export of gallium and germanium products heavily used to produce semiconductors.

The Chinese government has announced plans for export controls on metals predominantly used to manufacture semiconductors used in the development of artificial intelligence (AI) systems.

On July 3, the Chinese Ministry of Commerce issued a joint statement with the General Administration of Customs, saying the controls are aimed at protecting national security interests, and the export of specific gallium and germanium products will require a government-issued license.

The controls begin on Aug. 1 and include eight gallium-related products: gallium antimonide, gallium arsenide, gallium metal, gallium nitride, gallium oxide, gallium phosphide, gallium selenide and indium gallium arsenide.

They also cover six germanium products: germanium dioxide, germanium epitaxial growth substrate, germanium ingot, germanium metal, germanium tetrachloride and zinc germanium phosphide.

Gallium is a metal often found in electronics, with semiconductors being the most prominent use case, along with transistors and lasers. It can also be used to make LEDs. Germanium is used in the manufacturing process of semiconductors, along with solid-state electronics and fiber optic systems.

The statement said anyone who exports such products without proper permission or in excess will be punished.

According to a 2023 report from the European Commission and the European Association of Critical Raw Materials Alliance (CRMA), “the global supply of germanium is still highly concentrated in China.” The CRMA also reported over 80% of the world’s gallium comes from China.

In October 2022, the United States imposed sanctions that deprived Chinese developers of accessing the most advanced semiconductors on the market. These included Nvidia’s A100 chips and the latest version, the H100.

Nvidia A800 and H800 chips are currently accessible within the Chinese market. However, they can only support small-scale AI models. Chinese companies are reportedly searching for workarounds to overcome the lack of access to higher-performance chips.

Currently, officials in the U.S. are mulling over the possibility of additional restrictions on the export of high-level AI chips needed to produce powerful systems.

Since the AI boom, Nvidia — a major developer of semiconductors in high demand — has seen its chip values skyrocket. Cointelegraph reached out to Nvidia to comment on the recent developments out of China but did not receive a response by publication.

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