Taiwan information] China's export restrictions on semiconductor materials have limited impact on Taiwan

Bronx, USA, Thu, 27 Jul 2023 13:56:30 / Comserve Inc. / -- Analyzing the latest trends in Taiwan's machinery, electronics, semiconductors, automobiles, and energy industries

Y's Consulting Group (Headquarters: Taipei City, Republic of China, Representative Director: Yasushi Yoshimoto) has published the 4th week of July 2023 issue of Taiwan's machinery industry magazine "Y's Machinery Industry Journal". In this week's issue, we will introduce the power transmission parts industry, the semiconductor industry, semiconductor manufacturing equipment manufacturers, and Taiwanese machine tool import and export bulletins.

Catalogue of latest issue＞

• 2023 Taiwan Power Transmission Parts Industry and Trends of Major Manufacturers

• China's semiconductor material export restrictions have limited impact on Taiwan

• Semiconductor manufacturing equipment manufacturer, Hoyoku (Nova Technology)

• Taiwan Work Machinery Import and Export Quick Report - January to June 2023

This week's featured article

• China's semiconductor material export restrictions have limited impact on Taiwan

From August 1, 2023, China will implement export controls on items related to gallium and germanium, which are rare metals used in semiconductor materials. The impact on Taiwan's semiconductor industry is expected to be limited because China's high-purity gallium refining technology is not as good as that of Europe and the United States, in addition to its inventory.

　China's Ministry of Commerce announced on July 3, 2011 that it will implement export controls on gallium and germanium, gallium nitride (GaN), gallium arsenide (GaAs), etc. According to a report by the Wall Street Journal (WSJ), the move appears to be aimed at keeping the United States, Japan, and South Korea in check, which are tightening export controls on semiconductors to China.

　Chinese gallium is used by manufacturers of compound semiconductor (third-generation semiconductor) substrates needed to manufacture radio frequency (RF) chips and light emitting diode (LED) chips. Gallium is also used in communication equipment such as small base stations (small cells) that support fifth-generation mobile communication (5G) millimeter wave (mmWave) bands. There are concerns that China's export restrictions will affect upstream suppliers of third-generation semiconductors.

Enoster and Calm, 'limited impact'

　Taiwan's largest light-emitting diode (LED) company, Enostar, believes the impact will be limited as exports are not prohibited, but are subject to export control by the government. showed that.

　Wynn Semiconductors, the world's largest GaAs foundry, explained that the majority of substrates are procured from Germany and Japan, and the scale of procurement from China is small, so the immediate impact will be limited.

　Foundry companies in Taiwan that deal with third-generation semiconductors are confirming the inventories of their own and suppliers' items subject to export controls, and securing new supply sources. The manufacturing process of Taiwan's GaN foundry uses liquid trimethylgallium (TMGa), which is produced by refining gallium, and is procured mainly from major overseas semiconductor material manufacturers.

　China is the world's largest producer of gallium and germanium, accounting for more than 90% of the world's gallium production. Of these, 70% are used domestically and about 25% are exported. Germanium production accounts for 70% of the world total. China has an overwhelming advantage in terms of production share, but high-purity refining technology is dominated by European, American and Japanese manufacturers.

A blow to domestic industry

　In addition, Chinese suppliers temporarily export gallium and germanium overseas, then import highly purified products and supply them to domestic companies. For this reason, if too strict export controls are implemented at a stage when advanced refining technology has not been developed, the domestic industry will be hit.

To reduce dependence on China

　In an interview with foreign media, an executive at the German industry association (BDI), Europe's largest metal importer, said Germany needed to reduce its dependence on critical raw materials produced in China.

　In addition, gallium and germanium, which are obtained as by-products from large-scale aluminum and zinc smelters in the United States and Australia, have not been considered important until now. We are considering building a facility to refine the gallium and germanium recovered at the zinc refinery.

　It is unclear how much the export restrictions will benefit China, but the conflict between the United States and China over semiconductors is expected to intensify in the future.

Read more related articles: https://www.ys-consulting.com.tw/service/marketing/index.html (members only) 

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