What are Gallium and Germanium? China curbs exports of metals critical to chips and other tech
China is restricting exports of two niche metals that are key to manufacture electronics and semiconductors, as the tech battle with the U.S. and Europe heats up.
Germanium and gallium are the two metals in the spotlight.
But what and how crucial are they?
Why is China slapping export curbs on the metals?
China and the U.S. have been locked in a technology trade war that has been escalating since 2019. The U.S. has used trade blacklists and sweeping export restrictions to cut China off from key technology components and semiconductors or chips.
These critical pieces of tech have become a focal point in the battle between the two superpowers.
China has not retaliated much so far, but in May labelled U.S. chip firm Micron a “major security risk.” Now, Beijing is looking to areas it has some strength in — the metals and materials that go into electronics and semiconductors.
China’s commerce ministry on Monday said that new regulations will require exporters of gallium and germanium to get a license to ship the metals. Beijing brought in the new rules on national security grounds.
What are germanium and gallium?
Germanium and gallium are metals that are not found naturally. They are instead formed, usually as a by-product of the refineries of other metals.
Germanium, a silvery-white metal, is formed as by-product of zinc production. Fellow soft, silvery metal Gallium, meanwhile, is a by-product of processing bauxite and zinc ores.
What are germanium and gallium used for?
Germanium has several uses, including in solar products and fiber optics. The metal is transparent to infrared radiation and can be employed in military applications, such as night-vision goggles.
The solar panels that contain germanium have applications in space.
Gallium is used for manufacturing the gallium arsenide chemical compound, which can make radio frequency chips for mobile phones and satellite communication, for example. That compound is also a key material in semiconductors.
Which country produces the metals?
China produces 60% of the world’s germanium and 80% of gallium, according to the Critical Raw Materials Alliance, an industry body.
Gallium arsenide is complex to produce, and only a few companies in the world can do so. One is located in Europe, while the others are in Japan and China, the CRM Alliance says.
How big of a deal are China’s curbs?
“A warning shot, not a death blow,” Eurasia Group said in a note on Monday.
“But these latest measures are more limited in scope, and while the new rules require Chinese exporters to first obtain a license, no language automatically bars export to specific countries or end-users.”
The U.S. and Europe don’t import huge amounts of these materials. The U.S. received $5 million of gallium metal and $220 million of gallium arsenide in 2022, according to government figures.
Germanium intake was higher, with the country taking $60 million of the metal, while the EU imported $130 million of Germanium in 2022, according to data from S&P Global Market Intelligence.
Other countries are also able to produce these metals. Belgium, Canada, Germany, Japan, and Ukraine can manufacture germanium. Japan, South Korea, Ukraine, Russia and Germany meanwhile produce gallium.
There are also potential substitutes for these metals.
China’s scale allowed it to produce them at a lower cost than elsewhere, but Eurasia Group notes that Beijing’s moves will have a “limited impact on global supply given the targeted scope.”
“It is a shot across the bow intended to remind countries including the United States, Japan, and the Netherlands that China has retaliatory options and to thereby deter them from imposing further restrictions on Chinese access to high-end chips and tools,” Eurasia Group said.
Beta Technologies shares surged more than 9% after air taxi maker Eve Air Mobility announced an up to $1 billion deal to buy motors from the Vermont-based company.
Eve, which was started by Brazilian airplane maker Embraer and is now under Eve Holding, said the manufacturing deal could equal as much as $1 billion over 10 years. The Florida-based company said it has a backlog of 2,800 vehicles.
Shares of Eve Holding gained 14%.
Eve CEO Johann Bordais called the deal a “pivotal milestone” in the advancement of the company’s electric vertical takeoff and landing, or eVTOL, technology.
“Their electric motor technology will play a critical role in powering our aircraft during cruise, supporting the maturity of our propulsion architecture as we progress toward entry into service,” he said in a release.
Mateusz Slodkowski | SOPA Images | Lightrocket | Getty Images
Amazon’s cloud unit on Tuesday announced AI-enabled software designed to help clients better understand and recover from outages.
DevOps Agent, as the artificial intelligence tool from Amazon Web Services is called, predicts the cause of technical hiccups using input from third-party tools such as Datadog and Dynatrace. AWS said customers can sign up to use the tool Tuesday in a preview, before Amazon starts charging for the service.
The AI outage tool from AWS is intended to help companies more quickly figure out what caused an outage and implement fixes, Swami Sivasubramanian, vice president of agentic AI at AWS, told CNBC. It’s what site reliability engineers, or SREs, do at many companies that provide online services.
SREs try to prevent downtime and jump into action during live incidents. Startups such as Resolve and Traversal have started marketing AI assistants for these experts. Microsoft’s Azure cloud group introduced an SRE Agent in May.
Rather than waiting for on-call staff members to figure out what happened, the AWS DevOps Agent automatically assigns work to agents that look into different hypotheses, Sivasubramanian said.
“By the time the on-call ops team member dials in, they have an incident report with preliminary investigation of what could be the likely outcome, and then suggest what could be the remediation as well,” Sivasubramanian told CNBC ahead of AWS’ Reinvent conference in Las Vegas this week.
Commonwealth Bank of Australia has tested the AWS DevOps Agent. In under 15 minutes, the software found the root cause of an issue that would have taken a veteran engineer hours, AWS said in a statement.
The tool relies on Amazon’s in-house AI models and those from other providers, a spokesperson said.
AWS has been selling software in addition to raw infrastructure for many years. Amazon was early to start renting out server space and storage to developers since the mid-2000s, and technology companies such as Google, Microsoft and Oracle have followed.
Since the launch of ChatGPT in 2022, these cloud infrastructure providers have been trying to demonstrate how generative AI models, which are often training in large cloud computing data centers, can speed up work for software developers.
Over the summer, Amazon announced Kiro, a so-called vibe coding tool that produces and modifies source code based on user text prompts. In November, Google debuted similar software for individual software developers called Antigravity, and Microsoft sells subscriptions to GitHub Copilot.
WATCH: Amazon rolls out AI-powered tools to help big AWS customers update old software
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