Tuesday, June 11, 2024

China-US in new tensions over Microchips

Along with the US, Japan and the Netherlands have also imposed restrictions on chip technology exports to China.

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Beijing has taken a new step amid conflict and tension with the United States over microchips. China’s recently announced restrictions on the export of two key components for making semiconductors are about to come into effect. The Beijing administration’s new policy would require a special license to export gallium and germanium anywhere from the world’s second-largest economy.

These two elements are used in the production of military equipment including electronics and computer chips. In order to prevent China from advancing too far in the microprocessor technology industry, it was announced that the United States would take steps earlier. As part of that, Washington has imposed restrictions on semiconductor exports to China. China then imposed export controls on gallium and germanium.

China is the largest producer of gallium and germanium used worldwide. Critical Materials Alliance CRMA estimates that 80 percent of gallium and 60 percent of germanium used worldwide come from China. Gallium and germanium are called Minor metals are rarely found in nature. They are usually formed as a by-product of other processes.

Along with the US, Japan and the Netherlands have also imposed restrictions on chip technology exports to China.

ASML, one of the world’s leading semiconductor manufacturers, is based in the Netherlands. The timing of this announcement from China is no coincidence. Because earlier some other countries including Holland have imposed restrictions on chip exports to China. Colin Hamilton of the investment firm BMO Capital Markets said this in an interview given to the BBC. He said, the matter is very simple. If you don’t give me the chips, we won’t give you the ingredients needed to make these chips. The constant back-and-forth between the two world’s largest economies has raised concerns about increasing nationalization of resources.

In this trend, the government of one country keeps to itself the necessary and important material to influence another country. University of Birmingham Professor Dr. Kevin Harper said, we can see that the governments of different countries are now moving away from the idea of ​​globalization. He researched important elements like gallium and germanium.

He said, now there is no idea that international markets will provide these materials. And if you look at this picture on a larger scale, you will see that Western industry is at least somewhat threatened to protect its existence. Gallium arsenide is a compound made of gallium and arsenic. It is used in making high-frequency computer chips. This substance is also used in the production of light emitting diodes or LED lights and solar panels.

Siam Ahmed
Siam Ahmed is a student at Department of Economics, University of Barishal.

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