https://edition.cnn.com/2023/07/04/tech/china-export-controls-semiconductor-war-...




Laura He
By Laura He, CNN
Updated 8:45 AM EDT, Tue July 4, 2023



Hong Kong CNN  —



Beijing hit back Monday by playing a trump card: It imposed export controls on two strategic raw materials, gallium and germanium, that are critical to the global chipmaking industry.

“We see this as China’s second, and much bigger, counter measure to the tech war, and likely a response to the potential US tightening of [its] AI chip ban,” said Jefferies analysts. Sanctioning one of America’s biggest memory chipmakers, Micron Technology (MU), in May was the first, they said.

Here’s what you need to know about gallium and germanium, how they could play into the chip war and whether more countermeasures could be coming.
How did we get here?

Last October, the Biden administration unveiled a set of export controls banning Chinese companies from buying advanced chips and chip-making equipment without a license.

Chips are vital for everything from smartphones and self-driving cars to advanced computing and weapons manufacturing. US officials have talked about the move as a measure to protect national security interests.

But it didn’t stop there. For the curbs to be effective, Washington needed other key suppliers, located in the Netherlands and Japan, to join. They did.

China eventually retaliated. In April, it launched a cybersecurity probe into Micron before banning the company from selling to Chinese companies working on key infrastructure projects. On Monday, Beijing announced the restrictions on gallium and germanium.


What are these materials?

Gallium is a soft, silvery metal and is easy to cut with a knife. It’s commonly used to produce compounds that are key materials in semiconductors and light-emitting diodes.

Germanium is a hard, grayish-white and brittle metalloid that is used in the production of optical fibers that can transmit light and electronic data.

The export controls have drawn comparisons with China’s reported attempts in early 2021 to restrict exports of rare earths, a group of 17 elements for which China controls more than half of the global supply.

Gallium and germanium do not belong to this group of minerals. Like rare earths, they can be expensive to mine or produce.

Sir lastnail wrote on Jul 5^th, 2023 at 11:55am:



Silly old Joe Biden didn't see this coming.   

Easy fix. We stop all exports to China. That will soon show them whose bitch they are.

I'm pretty sure that will do more harm to China than anyone else.

It's like when they banned Australian coal. Not sure if our coal miners noticed, but the Chinese peasants noticed when the lights went out.

Sir lastnail wrote on Jul 5^th, 2023 at 11:55am:


Hey Nail, really like your comment. Spot on.

Not just greed, short term thinking by the west. China thinks long term, not quarter to quarter.

Super Nova wrote on Jul 5^th, 2023 at 6:01pm:


I blame Kissinger.

Bobby. wrote on Jul 5^th, 2023 at 7:29pm:


Because Australian manufactured goods are uncompetitive in price and quality.

Australians can't afford Australian manufactured goods.

Australia can't even make bricks when they can be transported halfway around the world from other countries at a lower price than Australian bricks.

freediver wrote on Jul 7^th, 2023 at 7:45am:



We made many things - but not anymore.
Melbourne used to be a place where unskilled workers could
get a decent paying job and raise a family.
Not anymore - all those jobs went offshore - to:
China, Malaysia, the Philippines & Vietnam  etc.

We didn't replace any of it with value adding to our commodities -
we even stopped making steel and just exported iron ore.
The Chinese make the steel and a lot of it has impurities
such as Boron which makes it brittle and causes
bridge and building collapses.
I wonder if that's what caused this:
https://www.ozpolitic.com/forum/YaBB.pl?num=1688252648

Bean counters running construction companies saved a few pennies
by using inferior Chinese products and now the whole world is paying a heavy price.

Sir lastnail wrote on Jul 7^th, 2023 at 9:05am:



yes - the Govt. made it easier for business people
to flip houses rather than invest in industry.

Sir lastnail wrote on Jul 7^th, 2023 at 9:09am:



China is really trying to bum chum us and the whole world
so will we be able to supply gallium and germanium now
or will it take years to develop the mines and processing?

The horse has bolted in respect of manufacturing in Australia. It's nigh impossible to stimulate any growth in it. Factors acting against it include:

1. Relatively high labour costs

2. Australia's overall strong currency.

3.Global competition from low labour cost countries which also benefit from economies of scale that we can't develop.

4. Small domestic market preventing the development of economies of scale.

5. Geographic isolation. The transport costs of importing materials and exporting manufactures undermine out competitiveness.

Captain Caveman wrote on Jul 7^th, 2023 at 2:39pm:



It's terrible - literally 10s of 1000s of businesses were closed down -
many were large profitable factories  - when they couldn't compete
on the level playing field with China where
they paid a bowl of rice per day and had no health and safety regulations.

freediver wrote on Jul 7^th, 2023 at 5:57pm:



I spoke to a few immigrants back in the early 80s.
When they arrived in Australia they could hardly speak English
but they could still earn a living in a factory and they enjoyed it.
It was a lot better than where they had come from in southern Europe.
Even 25 years or more after WW2 Europe was still devastated for many countries:
high unemployment, food rationing no prospects.
Even France still had food rationing in 1958 and so did England - I think?

The minimum wage here now is $23 an hour I think?
In India a University graduate would work for less than that!
It's hard to compete with 3rd world countries on wages.

Bobby. wrote on Jul 7^th, 2023 at 6:18pm:


We could never compete.

Shoemaking in Australia was protected by import tariffs. All those jobs were subsidised by the Australian public who had to pay far more for shoes and clothes.

Bobby. wrote on Jul 7^th, 2023 at 6:33pm:


Who cares? You can now buy a $4 shirt from kmart, or a $40 one from a specialty store, or even a $400 one if you are that way inclined. It is not for the government to decide for you.

freediver wrote on Jul 7^th, 2023 at 8:13pm:



Tell the EU that.
They make it their business to protect their industries and their jobs.
Australia allowed their industries to turn into an industrial graveyard.

Sir lastnail wrote on Jul 7^th, 2023 at 9:14pm:



Hi sir Nail,
the politicians should have been out there fighting for every job -
for every business to stay open.
That's what they do in Europe.
We have spent 30 years flipping houses in a Ponzi scheme.

Sir lastnail wrote on Jul 7^th, 2023 at 9:19pm:


So true.

Sir lastnail wrote on Jul 7^th, 2023 at 9:14pm:


The reason we cannot compete on salary in the various basket weaving industries is because so many people get paid so much in mining, oil and gas. And a lot of the rest are involved in industries that add far more value than working in a shoe factory. This is a good thing.

Quote:


Would you like to tell us what industries you are talking about?

Bobby. wrote on Jul 8^th, 2023 at 1:33pm:


That's what they do here. They paid rent-a-job from detroit and japan billions whilst completely side lining a local EV manufacturer

Electric car maker angry over import deal

https://www.smh.com.au/national/electric-car-maker-angry-over-import-deal-201007...

freediver wrote on Jul 9^th, 2023 at 7:36am:



But you said -
Quote:


The Govt. of the EU increases the price of our goods in Europe -
they decide for their people.

freediver wrote on Jul 9^th, 2023 at 8:10am:



yes - if it keeps people employed here -

remember - it's not a level playing field - it's unfair.
How can we compete with countries that pay
a bowl of rice per day as wages and have no health and safety conditions?

Chinese safety shoes - a pair of thongs.   
Child slave labor -
children sleeping in factories -
with the few pennies they make sent back
to their starving families to buy another bowl of rice.

freediver wrote on Jul 9^th, 2023 at 8:45am:



Just as Europeans suffer by paying more than they have to
for all their dairy products?
We're not allowed to dump our dairy products in Europe as it
would put their farmers out of business.
We're more efficient and productive than the Europeans.

By the way -
the Chinese have been known to sell steel and other products at a loss
in order to put overseas businesses out of business.
The USA and other countries have anti-dumping laws
otherwise their own businesses would have gone bankrupt and then the
Chinese would have put up their prices to recoup their money
and have a monopoly.
It's a trade war going on out there - it's brutal -
and in Australia we now have an industrial graveyard.


Small business died when he was in office -
he left an industrial graveyard:


Jump to 3:42

Sir lastnail wrote on Jul 9^th, 2023 at 9:49am:


Yes good example. They blocked our coal imports. And their lights went out.

Does that sound like a good idea to you?

Do you want to go back to paying at least $40 for a decent Tshirt so we can have a few local 'surf' brands?

Do you have a point Bobby?

Bobby. wrote on Jul 9^th, 2023 at 2:25pm:


Not because of any trade war. Because mining, oil, gas etc are pushing up salaries.

It tends to be farming that is given the heaviest protection. I suspect because single member electorates tend to give farmers a more coordinated political voice. Australia has been one of the worst offenders in that regard.

Bobby. wrote on Jul 9^th, 2023 at 3:49pm:


Australia. Europe. The United States. Probably any country where farmers are allowed to have an opinion.

This is why we have free trade agreements. Otherwise these "trade wars" would grind the global economy to a halt.