China responded swiftly on Tuesday to new U.S. restrictions on semiconductor technology exports by imposing tighter controls on critical minerals used in chip manufacturing.
The move targets gallium, germanium, and antimony - essential materials for advanced electronics and defense applications, The Wall Street Journal reports.
What Happened: A day after the U.S. blacklisted 140 Chinese entities and restricted exports of memory chips vital to artificial intelligence, Beijing retaliated with export bans and reviews for U.S.-bound shipments of these minerals. The Chinese Ministry of Commerce justified the measures as necessary for national security.
China also cautioned its businesses against purchasing American chips due to reliability and safety concerns.
The restricted minerals are critical to the U.S. economy and defense supply chains, with Beijing accounting for a significant portion of imports between 2019 and 2022. For instance, the U.S. relied on China for 80% of its antimony needs during this period, WSJ reports.
The new U.S. export controls, which took effect Monday, primarily target Chinese firms such as Naura Technology Group, Huawei-linked companies and equipment manufacturers. These measures also extend restrictions to non-U.S. chip suppliers reliant on American technologies, sparking concern among global players like Taiwan Semiconductor Manufacturing Co.
Why It Matters: The clash underscores the fragility of global supply chains and the geopolitical stakes tied to semiconductor dominance. With China tightening its grip on critical materials, the U.S. faces mounting pressure to diversify its supply sources.
Experts warn these developments could reshape the global semiconductor landscape as companies and governments navigate new trade barriers. U.S. firms such as Nvidia Corp.
ETFs such as the Invesco Semiconductors ETF
