China’s recent imposition of export controls on gallium (Ga) and germanium (Ge), two rare-earth metals critical to various industries, has raised concerns and prompted discussions about the global supply chain for these materials. These controls require Chinese exporters to obtain licenses for international distribution of these metals.
Ga and Ge are essential for producing semiconductor chips, optics, laser diodes, and other components used in various applications.
Export controls and restrictions are not new in the ongoing competition between the U.S. and China for supremacy in the semiconductor industry. However, there is growing apprehension that these export controls could potentially escalate into a broader commercial dispute. Following the passage of the CHIPS Acts in both the U.S. and the European Union (EU), China holds a significant market share of critical raw materials. Estimates from various sources indicate that China supplies between 80% and 98% of the world’s raw Ga and around 60% of global Ge supply. In the U.S., Ga is predominantly used in integrated circuit chips (74%) and optoelectronic devices (25%).
Additional data reveals the Western world’s dependence on these materials. Between 2018 and 2021, over half of the Ga metal imported by the U.S. came from China, and more than 70% of the EU’s raw Ga metal supply originates from China.
While the immediate impact of China’s export controls on semiconductor manufacturing may not be fully felt, concerns about the stability of the supply chain have spurred discussions about alternative materials, particularly chalcogenide glass as a substitute for Ge optics.
Industry Response: Manufacturers in the optics industry quickly responded to China’s export controls by considering alternative materials. Rochester Precision Optics (RPO), for example, announced plans to increase production of its chalcogenide materials as potential substitutes for crystalline Ge and Ga substrates in IR imaging optics. Other companies, such as SCHOTT and LightPath Technologies, also market similar chalcogenide glass compositions, which are being considered as alternatives to Ge in space and military applications.
Performance Comparisons: Comparing Ge to chalcogenide alternatives involves considering their specific characteristics. While Ge is known for its toughness and impact resistance, chalcogenides offer several advantages, including lower weight and lower fabrication costs. In many applications, chalcogenides can replace Ge without compromising performance. Factors such as Ge’s susceptibility to thermal darkening and its hardness in comparison to chalcogenides have become less significant due to advancements in technology.
Challenges in Adoption: The optics industry is moving towards chalcogenides, but one major obstacle is obtaining Department of Defense (DoD) qualifications for these materials. The numerous chalcogenide compositions and the need for system redesign pose challenges for defense contractors, particularly for legacy systems.
The Long Game: The export controls imposed by China could accelerate the transition from Ge to chalcogenides in the optics industry. However, it’s expected that investments in Ge sourcing and the gradual adoption of chalcogenides will precede a complete materials swap. New supply streams for Ge, coupled with increased chalcogenide adoption, could alleviate supply concerns.
While recent announcements about expanding Ga and Ge production outside of China show progress, the mining process takes time and is expensive. Major rare-earth mining in the West may not fully materialize as long as Chinese materials remain available.
In conclusion, China’s export controls have raised awareness about the need for alternative materials in the optics industry. While chalcogenides offer promising alternatives, challenges remain in obtaining qualifications and redesigning systems. The future of the industry will likely involve a transition period as it adapts to changing supply dynamics.
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