The Ministry of Commerce of China stated on Monday that due to national security concerns, restrictions will be imposed on the export of 8 types of gallium and 6 types of germanium starting from August 1, 2023. Here are some facts related to these rare metals:

Germanium origin: Germanium ore is quite rare, so most of the produced metal germanium is obtained from the by-product of zinc production - fly ash. According to the data of the Key Raw Materials Alliance (CRMA) of the European Industry Association, about 60% of the world's germanium is produced in China, and the rest is from Canada, Finland, Russia and the United States. In 2022, Chinese customs data showed that China exported 43.7 tons of unwrought and processed germanium.

Source of gallium: residual amount of gallium existing in zinc ore and Bauxite. Metal gallium is obtained in the process of extracting aluminum from Bauxite. According to CRMA, approximately 80% of the supply of gallium metal comes from China. Gallium plays an important role in the production of gallium arsenide required for electronic products. According to CRMA, only a few companies are able to produce gallium arsenide products with the required purity, with one located in Europe and the other in Japan and China. In 2022, China exported 94 tons of gallium, a year-on-year increase of 25%.

Global producers: In addition to China, Japan, Russia, and South Korea also produce a small amount of gallium, with an estimated production of 10 tons by 2021. In the past, Germany and Kazakhstan have also provided these metals. Berlin announced that it will restart original gallium production, becoming the latest gallium producing country in the world. The largest germanium producer in North America is Canadian Teck Resources, which mines germanium in British Columbia. The American Indium Company also produces germanium, while the Belgian Umicore supplies these two rare metals.

Applications: These two metals are widely used in high-speed computer chips, Arms industry and renewable energy. Germanium is a key element in fiber optic cables and is also used in high-speed computer chips, plastics, and infrared radiation. Germanium and its oxides are crucial for military applications, such as night vision equipment and satellite image sensors. At the same time, in the field of low-carbon technology, such as solar panels, these two metals also play an important role. Wafers made of gallium arsenide have high temperature resistance, higher work efficiency at high frequencies, and generate less noise, making them suitable for applications such as radar, radio, satellites, and LED.

Substitutes and prices: Some applications of gallium can be replaced with silicon or indium. Germanium and germanium glass can also be replaced by Zinc selenide in infrared system, but some performance may be sacrificed. At present, the prices of gallium and germanium are both in an upward phase. According to Reinitiv Eikon's data, the 99.99% pure gallium price on the Shanghai Metal Exchange reached RMB 1775 per kilogram (approximately $245) on Monday, the highest since May 16th, with a 5.97% increase from the previous trading day. The trading price of germanium rods in China is 9150 yuan (approximately 1264 US dollars) per kilogram.

These rare metals play an important role in the high-tech industry, which will have a significant impact on the global supply chain and industrial landscape. The widespread application of rare metals gallium and germanium in the fields of semiconductor materials and new energy has attracted industry attention. Gallium is known as the "new grain of semiconductor industry", while germanium is one of the important semiconductor materials.

Rare metals gallium and germanium play important roles in chip manufacturing and are indispensable raw materials. We are familiar that chips are made of silicon, but in reality, chip manufacturing also requires many other raw materials, among which gallium and germanium compounds are one of the crucial raw materials for chip manufacturing.

Taking gallium nitride (GaN) as an example, compared with traditional silicon (Si) and silicon carbide (SiC), GaN materials have higher Electron mobility, saturated electron velocity and breakdown electric field. This enables GaN power devices to have lower conduction resistance and better conduction and switching performance. Due to its low conduction resistance and high power density, GaN power devices have a smaller volume, which is also the reason why devices such as chargers commonly use GaN. In fact, there is broad potential for the application of gallium nitride in any field related to power supply. In addition, other major compounds of gallium include gallium arsenide, Gallium phosphide and copper indium gallium selenium. These materials are widely used in semiconductor materials, semiconductor light-emitting devices, integrated circuits, transistors, radio frequency devices (including 5G and national defense communications), functional synthetic materials, thermometers, CIGS thin film solar cells and other fields. The semiconductor industry is the largest consumer of gallium, accounting for approximately 80% of total consumption.

Global gallium resources are mainly distributed in Africa, Oceania, South America, Asia, and other regions. Although the distribution is relatively scattered, China is one of the countries with the richest gallium reserves in the world, mainly concentrated in Sichuan, Guizhou, Jiangxi, Shanxi, and Yunnan regions.

Similar to gallium, the global distribution of germanium is mainly concentrated in China and the United States, which together account for over 40% of the global germanium resources, and Russia also has some germanium resources. It is worth noting that germanium mines in the United States are mainly associated with lead-zinc mines, but due to the lack of large-scale smelting facilities, germanium mining in the United States has become economically meaningless. In contrast, China's germanium is mainly associated with lignite mines. In addition to advanced processing technology, China has become a major country in the global germanium mining output. China and Russia account for more than 70% of the global production capacity.

Germanium is also an important semiconductor material, and its compounds have excellent optical properties, playing an important role in the military field. In the civilian field, germanium plays a crucial role in optical lenses, optical fibers, solar panels, and other fields. In summary, despite countries such as the United States and the Netherlands exerting control over chip equipment, we have launched a counterattack in areas where we have a say. In this fiercely competitive environment, the equipment and raw material markets play a crucial role.