How China’s Gallium & Germanium Export Ban is Disrupting Supply Chains

Incident Overview

On Tuesday, December 3, China announced it would ban exports of gallium, germanium, antimony, and other key materials in high-tech manufacturing. The move by the Chinese Commerce Ministry comes one day after the U.S. Bureau of Industry and Security (BIS) amended the Export Administration Regulations (EAR) by adding 140 entities to the Entity List.

Entities on the list include those from Japan, South Korea, Singapore, China, and the People’s Republic of (China). However, one-hundred and twenty five of the entities listed are from China, making it the most significantly impacted by these new restrictions. 

What is the BIS Entity List?

The BIS Entity List is one of the primary sanctions lists administered by the Department of Commerce. The Entity List is composed of individuals, businesses, organizations, and other “legal persons” that U.S. businesses must fulfill special licensing requirements for in order to send any items subject to the EAR. These licensing requirements may vary between listed entities, and the Entity List published in the Code of Federal Regulations specifies these obligations. The BIS is responsible for reviewing these license applications and evaluating them according to “all applicable licensing policies.”

The Entity List increased nearly ten-fold in the decade between 2011 and 2021. Today, it restricts well over 1,000 entities from receiving U.S. exports. 

Why Were These Entities Added to the Entity List? 

In its ruling, the BIS observed that several entities added to the list were identified as being involved in the development or production of “advanced-node ICs,” which are “contrary to the national security and foreign policy interests of the United States.”

The document also stated that “these entities pose a significant risk of contributing to the efforts of Huawei Technologies, Co., Ltd., a party on the Entity List, to support China’s government’s goal of indigenous production of ‘advanced-node ICs’ to support its military modernization.”

In summary, the entities added to the BIS Entity List are allegedly involved in a range of activities related to semiconductor development, including the production of advanced integrated circuits (ICs), semiconductor manufacturing equipment, and materials essential to the production of high-tech components.

China’s 2023 Gallium & Germanium Export Restrictions 

This is not the first time China has moved to control the flow of technology-critical elements (TCE). On July 3, 2023, China’s Ministry of Commerce (MOFCOM) announced a series of restrictions on the export of gallium and germanium, two vital elements used in semiconductor and consumer electronics manufacturing. 

Those restrictions, which began in August 2023, required all exporters to obtain a license to ship germanium and gallium out of the country. Exporters were also required to identify importers, end users, as well as how the metals would be used, with Beijing officials citing national security and state interests as the driving motivator. 

These announcements last year were followed by new restrictions in August 2024, when MOFCOM said it would add export restrictions to antimony, graphite, diamonds and some synthetic materials. 

What Makes This New Ruling Different Than 2023?

This new ruling, effective immediately, bans exports of gallium, germanium, antimony, and other materials to the U.S. Unlike earlier measures requiring export licenses and lacking regional specificity, it imposes a total ban targeting the United States.

It is not yet clear how this ruling will be enforced. 

The full notice (translated by Center for Security and Emerging Technology), mentions two specific bans:

1. The export of dual-use items to U.S. military users or for military uses is prohibited.
2. In principle, the export of the relevant dual-use items gallium, germanium, antimony, and superhard materials to the United States is not permitted; stricter end-user and end-use checks will be implemented on exports of dual-use graphite items to the United States.

What Are Gallium, Germanium & Antimony?

Gallium (Ga) and germanium (Ge) are two chemical elements that play vital roles in the semiconductor and consumer electronics manufacturing industries. Neither element is found naturally; both are byproducts from the harvesting of other metals such as zinc and bauxite.

Antimony (Sb) is a naturally-occurring chemical element frequently combined with other metals to produce alloys used in a variety of products, including batteries, semiconductors, and diodes. It is not especially common, but it is also not exceedingly rare. 

Where are Gallium, Germanium, & Antimony Used in Electronics?

Gallium is used to manufacture compound semiconductor wafers, which are used in a variety of goods including solar cells, LEDs, fiber optics communication, and even dentistry. Germanium is used in semiconductor manufacturing as well as fiber optic systems, solar cell applications, and LEDs. Germanium is also regularly used in airport security scanners.

Antimony is frequently combined with other metals to produce alloys known for their hardness and strength. Common applications include electrical and energy-related technologies, batteries, semiconductors, and diodes. 

Who Produces Gallium, Germanium & Antimony?

Gallium

According to the U.S. Department of Energy, the United States relies on China for 95% of its gallium supply. The report found that the United States “does not have sufficient domestic resources to meet expected demands for certain critical materials, such as cobalt and gallium.”

Germanium

China is also the main producer of germanium, “making up 80% of the element’s total worldwide production during 2012-2016.”

Antimony

As of 2022, China accounted for 55% of global mine production of antimony. The U.S. has no domestic mining operations for antimony. Approximately 85% of the antimony used in the U.S. is imported, with top importers listed as:

• China
• Italy
• Belgium
• India

According to the United States Geological Survey (USGS), principal locations for antimony include Australia, Bolivia, Burma, China, Mexico, Russia, South Africa, and Tajikistan.

How Many Parts Are Impacted by These Bans?

While enforcement methods remain to be seen, a Z2Data analysis of suppliers in its database found the potential impact to be significant. Nearly 1,000 suppliers produce components containing at least one of these banned elements, spanning 16 distinct component types. 

Affected parts span across 16 distinct component types. These include:

• Semiconductors
• Cables and Wires Management
• Power and Circuit Protection
• Electromechanical 
• LEDs
• Memory
• Optoelectronics
• Sensors
• Test and Measurement
• Thermal Management
• Tools & Production Supplies

Total Number of Estimated Parts Affected

In total, an estimated more than 700,000 parts will be impacted by these bans. The majority of affected parts contain antimony (94%), gallium (3%), germanium (2%), or some combination of two or more. 

Products affected include:

• MOSFETs
• Zener Diodes
• Transient Voltage Suppressors (TVS)
• Rectifiers
• Encoders

What Does This Mean for Manufacturers?

While enforcement methods remain unclear, this escalation in trade restrictions indicates two clear challenges for manufacturers and suppliers.

1. Pursue Multisourcing Strategies

Manufacturers must embrace multisourcing strategies to mitigate the risks posed by the ongoing technology trade war between China and the U.S. While multisourcing gained momentum during the COVID-19 pandemic as companies sought alternative suppliers to meet demand, this sourcing strategy is vital to reduce geopolitical risk and strengthen supply chain resilience.

As researchers at the University of Tennessee put it in a 2017 academic paper on the practice, “Multiple sourcing can help reduce a firm’s exposure to various types of risk, e.g. shortages, strikes, natural disasters, technological uncertainty and can help maintain competitiveness between suppliers.”

2. Minimize Regional Dependencies

The China Plus One strategy remains a critical approach for companies aiming to lower their risk profile. Recent developments underscore the escalating trade war between China and the U.S., driven by national security concerns. In light of this growing geopolitical instability, companies should take a closer look at their supply chains to identify components, suppliers, and manufacturing sites that may be particularly vulnerable.

Identify Your Ties to Risky Suppliers with Z2Data

When uncovering ties to sanctioned entities, visibility is critical. At Z2Data, we help you identify and map sub-tier suppliers, giving you a clearer view of your connections.

Our Supplier Insights solution identifies which manufacturers and businesses are sanctioned and pose supply chain risks by tracking 28 lists across 16 countries, including the U.S., Canada, France, Japan, and China. What sets Supplier Insights apart is its integration with your BOM data, providing a tailored view of how potential sanctions could directly impact your suppliers and business.

Contact Z2Data to get a detailed, custom report on how these developments could affect your supply chain. Sign up for a free trial today at www.z2data.com/free-trial.