China's metal export restrictions impact Asia's chip sector

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Trade officials across Asia were assessing the fallout from the latest escalation in the technology battle between the United States and China after Beijing said it would impose restrictions on exports of metals used in chip manufacturing. South Korea's Commerce Ministry called an emergency meeting to discuss China's decision to control exports of gallium and germanium, metals used in chips, electric vehicles and a range of telecommunications products. “We cannot rule out the possibility that the measure will be expanded to other items,” said Joo Young-joon, South Korea's vice minister of commerce. Japanese Trade Minister Yasutoshi Nishimura said Tokyo was studying the impact on its businesses, as well as checking Beijing's plans to implement the controls. Tokyo kept the door open for action at the World Trade Organization, warning it would oppose any breach of international rules.

South Korea and Taiwan are home to Samsung and TSMC, companies that dominate semiconductor manufacturing, while Japanese companies play a key role in the chip supply chain. Taiwan Vice Foreign Minister Roy Lee Job Function Email Database said Beijing's move is likely to have a short-term impact, including raising prices. Export controls “will be a kind of accelerator for countries like Taiwan, South Korea and Japan to reduce our dependence on China for the supply of those critical materials,” Lee added. Beijing's announcement of the controls on Monday showed how Xi Jinping's administration is willing to attack Western interests in response to Washington's tighter restrictions on China's access to sophisticated technology. The metal restrictions are significant because China dominates the production of many raw materials critical to modern technology and infrastructure.



Chinese Foreign Ministry spokesman Mao Ning said Tuesday that China “has always implemented fair, reasonable and non-discriminatory export control measures.” She said the measures were “common international practice and are not targeted at any specific country.” Gallium and germanium are among dozens of minerals classified by the U.S. government as critical to economic and national security. The US State Department did not immediately respond to a request for comment. You are viewing a snapshot of an interactive chart. This is most likely because you are offline or JavaScript is disabled in your browser. The move comes just days before US Treasury Secretary Janet Yellen's visit to Beijing, which begins Thursday, in a trip billed as an attempt to stabilize the turbulent US-China relationship. “This looks like a blow from China launched at the US – a warning about what supply chain disruptions can do to inflation, interest rates and the presidential election,” Nomura analyst CW Chung said in Singapore.