China’s recent ban on the export of gallium and germanium, essential materials for display manufacturing, has sparked concerns in the technology industry. The ban, which starts today, comes amidst the ongoing trade war between China and the United States. As China is a leading producer of these metals, accounting for about 60% of global gallium production and 90% of germanium production, the ban is expected to have far-reaching consequences on the global display industry and beyond.
Gallium and germanium are crucial components in the production of high-quality displays, including liquid crystal displays (LCDs) and organic light-emitting diode (OLED) displays. With the global display industry already facing challenges due to the ongoing chip shortage, the ban on gallium and germanium is likely to exacerbate the situation further. Display manufacturers may end up having to find alternative sources for these metals but will definitely face more barriers to their import from China leading to price increases and supply shortages.
Of course, both metals are also much used in semiconductor manufacturing, affecting sectors like fiber optics, infrared optics, solar cells, and defense equipment as well as electronics products in general. We may be facing shortages and price rises across a range of consumer electronics goods in the short term.
China’s decision to restrict the export of these critical metals also has political implications, as the United States accuses China of leveraging its dominance in rare earths to advance its economic interests. The ban adds to the ongoing trade tensions between the two nations. While China states the ban is temporary, its duration remains uncertain, depending on the progress of the trade war. This uncertainty puts companies at risk, prompting them to seek ways to diversify import channels and reduce dependence on China for their supply chain.
South Korea, for instance, heavily dependent on China for gallium and germanium imports, has faced potential risks to its supply chain. To mitigate these risks, the Korean government is enhancing the monitoring of key metal supply chains and seeking measures to minimize industrywide impacts. The government aims to establish consultation bodies to share information on global supply situations and develop replacement technologies.