China has introduced new restrictions on the export of critical chip-making materials to the United States, a move that follows just a day after the Biden administration imposed fresh sanctions aimed at curbing China’s ability to produce advanced semiconductors. The escalating tit-for-tat measures underscore the growing tensions between the two nations over access to technology essential for artificial intelligence (AI) and military systems.
On Tuesday, China’s Ministry of Commerce announced it would halt the sale of key minerals to the U.S., including gallium, germanium, and antimony, citing national security concerns. These materials are essential in the production of semiconductors and have potential military applications. Additionally, China declared it would impose stricter oversight on the export of graphite, further tightening its control over resources crucial to global technology supply chains.
This announcement comes on the heels of new rules from the U.S. Department of Commerce, unveiled Monday, aimed at “further impairing” China’s ability to manufacture advanced semiconductors. These rules restrict access to semiconductor manufacturing equipment, high-bandwidth memory chips, and certain types of software, effectively limiting China’s capability to advance its AI and weapons systems. Moreover, the U.S. added 140 new Chinese companies to its export control list, barring them from accessing critical technologies.
“This action is the culmination of the Biden-Harris Administration’s targeted approach, in concert with our allies and partners, to impair the PRC’s ability to indigenize the production of advanced technologies that pose a risk to our national security,” U.S. Secretary of Commerce Gina Raimondo stated.
Escalating Control Over Rare Minerals
China has been gradually tightening its grip on the export of rare materials over the past several months. In September, the country began restricting the export of antimony, a mineral crucial for both semiconductor production and military applications. According to reports from The New York Times, exporters have since been required to provide detailed information on how these materials would be used in Western supply chains, a move seen as part of a broader strategy to maintain leverage over global technology markets.
Gallium and germanium, two other key materials now restricted, are indispensable for creating components used in advanced electronics, including high-performance chips and military systems. By limiting access to these resources, China is leveraging its dominant position in the global supply of these materials to counter U.S. sanctions.
The U.S.-China Semiconductor War
The U.S. restrictions represent the latest step in a broader strategy to reduce China’s access to critical technologies. The sanctions introduced this week build on earlier measures designed to prevent Chinese companies from acquiring advanced semiconductor manufacturing tools and high-end chips. By collaborating with allies and partners, the U.S. aims to prevent China from advancing its AI capabilities, which are seen as a potential threat to national and international security.
These moves are part of an ongoing struggle between the world’s two largest economies for dominance in critical technologies. Advanced semiconductors are essential not only for consumer electronics but also for cutting-edge military equipment, AI systems, and other technologies critical to national security. Both nations see control over the supply chains for these materials as key to maintaining their strategic advantages.
Broader Implications and Future Developments
China’s new export controls on chip-making materials could have far-reaching implications for the global tech industry. The U.S. and other countries rely heavily on Chinese supplies of gallium, germanium, and graphite to produce semiconductors and other high-tech components. Disruptions to this supply could create shortages, drive up costs, and force companies to seek alternative suppliers—an effort that could take years to achieve given China’s dominance in the market.
Tensions are expected to escalate further, particularly as President-elect Donald Trump has vowed to impose additional tariffs on Chinese goods. Such measures could intensify the economic and technological decoupling between the two countries, with significant ripple effects across global trade and industry.
China’s move to control its mineral exports also reflects a broader trend of weaponizing supply chains in geopolitical conflicts. By restricting access to materials critical to semiconductor production, China is sending a clear signal that it will not shy away from using its dominance in rare-earth minerals and other resources as leverage in its standoff with the U.S.
Outlook
The unfolding semiconductor conflict highlights the high stakes involved in the competition for technological supremacy. Both the U.S. and China are deeply entrenched in efforts to secure their respective advantages, with the U.S. targeting China’s ability to develop cutting-edge technologies and China leveraging its control over essential resources. As the rivalry intensifies, businesses and governments worldwide will likely face mounting pressure to adapt to an increasingly fragmented and unpredictable global technology landscape.