Restricted Minerals
The semiconductor industry in South Korea has expressed concern about China’s export controls on gallium and germanium, stating, “There will be no immediate impact, but if supply difficulties persist, there could be problems in the transition to the next-generation supply chain.”
According to the industry on July 4, gallium and germanium are not currently directly used in the main processes of domestic semiconductors. An industry insider explained that, “The amount of gallium and germanium directly purchased by domestic semiconductor companies is minimal, and even the indirect intake through cooperative companies does not constitute a significant proportion.”
However, the GaN power semiconductor, seen as a new growth area in the semiconductor industry, could be a concern. Samsung Electronics has announced its entry into the GaN semiconductor foundry market from 2025, and if supply difficulties arise, even with incoming orders, it may be challenging to match the required quantity.
Gallium is used in solar panels, but the concern is not immediate because they are produced locally in China. Hanwha Q CELLS, the leading solar module provider for homes and businesses in the U.S., imports wafers, an essential material for solar cell production, from China. The industry believes that the immediate impact on the domestic industry is limited because gallium is used when producing wafers locally in China.
There could be issues at the next-generation production base. Hanwha Q CELLS is investing 3.2 trillion won (US$2.5 billion) in the U.S. state of Georgia to build a Solar Hub that produces everything from polysilicon ingots to wafers, cells, and modules. If China, which holds 94% of the world’s gallium reserves, imposes export restrictions, there could be disruptions in wafer production for solar use at the Solar Hub, which is due for completion next year.
The industry's response contrasts with the heightened sense of crisis last year when Russia imposed export controls on rare gases such as neon, essential for advanced processes. Despite this, China's pinpoint targeting of these two resources is interpreted as an attempt to demonstrate its influence in the next-generation semiconductor market, which will take off from 2025.