Implications of China's Export Controls On Semiconductor Supply Chains

The recent export controls imposed by China on gallium and germanium – two critical rare earth metals used in semiconductor manufacturing – have caused a significant surge in commodity prices. This trend is anticipated to persist owing to China’s position as the largest reserve of rare earth metals globally. As a consequence, Western supply chains are likely to experience upstream impacts. Both metals are included in the critical raw materials list of the US and EU. Top sectors such as semiconductors, aerospace, and defense are expected to face severe consequences. Moreover, Japan and the Netherlands have raised concerns by imposing export restrictions on advanced chip manufacturing equipment.