In recent weeks, we have seen how China has decided to take a more aggressive role in response to boycott and veto policies by other superpowers. Although this time they have not vetoed a company as happened in the case of Micron, but this time they have decided control the export of gallium and germaniumtwo essential metals for the creation of hardware.
Trade is the best thing humanity has to offer, as it prevents wars between different groups of people over access to a resource and gives everyone access to it. Unfortunately, in recent years, we have seen the United States act again and its most typical way of proceeding, that of the economic blockade and boycott. A strategy that is not new in the country of stars and stripes. You can have this attitude with a less capable nation, but when you touch the morale of another superpower like China a lot, then things change completely.
China will control the export of Gallium and Germanium
The continuous boycott policy by the United States has caused Xi Jinping’s country to have to react. Although China does not have as significant technological advances as the United States, it does stand out in raw materials for the creation of semiconductors. Well, China has struck back. changing the export regulations for gallium and germaniumtwo crucial metals in the manufacture of chips, as has been learned through Bloomberg.
As of next August 1, any Chinese company in charge of the export of said metals must obtain an export license and this will be controlled by the government of that country. under the argument of national security. Although we know that said superpower is a dictatorship, it is not different from the argument that is given from the United States and the European Union to veto and boycott the Asian superpower.
Which components will this restriction affect?
The restriction of both metals by China nor it will affect the manufacturing of CPUs, GPUs and memories, but it will do it to other components that are just as basic. We must start from the fact that both germanium and gallium are used in pieces that have to do with the power supply of the circuitrya, modulation through radio frequency for the Bluetooth or Wi-Fi, the RGB LEDS of some peripherals, liquid metal cooling, etc. Therefore, several industries would be affected by this and it could lead to a collapse in the industry due to a massive shortage of both metals.
let’s not forget that more than 90% of these minerals are found in China or under the control of said country under allied nations. So if China stops supplying them, then its cost of scarcity can rise considerably. To the point of making certain products economically unfeasible and even sinking entire companies. At the same time, the access to all the Gallium and Germanium by the controlled power Xi Jinping creates too great a competitive advantage in its favor.
We will not go into which superpower is worse, but there is no doubt that this is reaching dangerous levels, which not only affect end users, but also the different participants in the sector. While politicians are not splashed at all by their absurd decisions. What we do know is that we are negatively affected by geopolitical tensions.