China just fought back in the semiconductor exports war. Here’s what you need to know. – by Zeyi Yang (MIT Technology Review – July 10, 2023)

The country aims to restrict the supply of gallium and germanium, two materials used in computer chips and other products. But experts say it won’t have the desired impact.

China has been on the receiving end of semiconductor export restrictions for years. Now, it is striking back with the same tactic. On July 3, the Chinese Ministry of Commerce announced that the export of gallium and germanium, two elements used in producing chips, solar panels, and fiber optics, will soon be subject to a license system for national security reasons.

That means exports of the materials will need to be approved by the government, and Western companies that rely on them could have a hard time securing a consistent supply from China.

The move follows years of restrictions by the US and Western allies on exports of cutting-edge technologies like high-performing chips, lithography machines, and even chip design software. The policies have created a bottleneck for China’s tech growth, especially for a few major companies like Huawei.

China’s announcement is a clear signal it aims to retaliate, says Kevin Klyman, a technology researcher on the Avoiding Great Power War Project at the Harvard Kennedy School’s Belfer Center for Science and International Affairs. “Every day the technology war is getting worse,” Klyman says. “This is a notable day that accelerated things further.”

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