On July 3, China’s Ministry of Commerce and General Administration of Customs announced that gallium-related products, which are used as raw materials for semiconductors and other materials, are subject to export control. Starting from August 1, Chinese exporters are not allowed to export without the approval of the authorities. Some analysts believe that this is a countermeasure against the strengthening of controls on China such as the export of sophisticated semiconductors under the leadership of the United States.
Compound semiconductors using gallium are indispensable in electronic devices. Gallium nitride (GaN) is used for laser applications, etc., and Japanese companies lead the world in terms of market share of related substrates. The use of power semiconductors for pure electric vehicles is also expected to spread in the future.
In order to reduce power loss, Japan’s Nidec and Renesas Electronics are studying the use of GaN substrates. According to the U.S. Geological Survey, China accounts for 98% of the world’s gallium production.
Novel Crystal Technology, a start-up company funded by Japan’s AGC and JX Metals, is advancing research and development of gallium oxide as a next-generation wafer.
If it is unable to source gallium from China, which supplies it in large quantities, it will need to find alternative import sources for production. The inability of companies to source gallium cheaply may have an impact on the practicalization of these cutting-edge technologies.
China implemented the Export Control Law in December 2020 to strengthen export controls on strategic goods and other items. It is able to prohibit exports to specific foreign companies on the grounds of security and safety, etc. The export control of gallium is based on this law, among others. In the past, semiconductors used for electricity and financial encryption technology and to prevent data leaks were exported under a licensing system.
The Wall Street Journal reported that the U.S. government is discussing expanding the scope of export controls on Chinese semiconductors. The expansion would target semiconductors needed for cutting-edge artificial intelligence (AI). Some analysts believe that China’s measures are a countermeasure against U.S. and other export controls on China.