China to restrict exports of metals critical to chip production

China imposed restrictions on exporting two metals used to make semiconductors and other electronics, a move that’s likely to raise costs for hardware manufacturers and worsen geopolitical tensions over the race to develop advanced computing technology.

Gallium and germanium, along with their chemical compounds, will be subject to export controls starting Aug. 1, China’s Ministry of Commerce said in a statement Monday. Introducing the measures will serve national security and China’s national interest, the statement showed.

China is the leading producer of 20 critical raw materials, including gallium and germanium, as measured by its share of global mining. It is also dominant in refined production and processing. These two metals are used in a wide range of products such as solar panels, lasers, night-vision goggles and computer chips.

Exporters for the two metals will need to apply for licenses from the commerce ministry if they want to start or continue to ship them out of the country, according to the statement. The firms are required to report details of the overseas buyers and their applications, and reviews might be escalated to the State Council if needed.

The measure is the latest development in a global battle to control technologies vital to industrial and military capabilities, and could be seen as an escalation of the worsening relationship between China and strategic rivals such as the US.