China Implements Export Controls on AI Chips

BEIJING – According to a South China Morning Post report, China’s government has imposed export restrictions on raw materials needed for manufacturing artificial intelligence (AI) chips. Slated to take effect on August 1, 2023, the bans were said to be announced by the Chinese Ministry for Commerce, which aims to safeguard national security interests.

The export controls encompass raw materials derived from gallium and germanium. Gallium, commonly found in electronics, plays a crucial role in the production of semiconductors, transistors, lasers, and LEDs. Conversely, Germanium is vital in semiconductor manufacturing, solid-state electronics, and fiber optics. 

The Ministry has warned that severe penalties will be imposed on individuals or entities found exporting these controlled products without proper authorization or exceeding permitted limits. According to a new report from the European Commission and the European Association of Critical Raw Materials Alliance, China remains the dominant global supplier of germanium, with over 80% of the world’s gallium supply originating from China. 

In October 2022, the U.S. sanctioned Chinese developers’ access to advanced semiconductors, including Nvidia’s popular A100 chips. In light of these restrictions, U.S. officials are considering additional measures to limit the number of exported high-level AI chips required to produce powerful AI systems.