Depth丨Gallium and germanium will drive the globalization of semiconductors

Both germanium and gallium are important semiconductor raw materials, strategic basic raw materials, and core materials for manufacturing chips.

Gallium is called the "new food for the semiconductor industry" and is widely used in the optoelectronics industry and the microwave communication industry; germanium is used to manufacture transistors and various electronic devices.

Specifically, the faster the chip, the more it needs a compound such as silicon and germanium, that is, the combination of silicon and germanium to speed up the chip.

Both materials are core elements of third-and-a-half and fourth-generation advanced semiconductors.

It is not only directly related to the core part of military semiconductor materials, but also involves the competition for the strategic commanding heights of the next generation of civilian semiconductors in the future.

In addition to semiconductors, it also involves fast charging technology, which is extremely important now and in the future.

At present, my country's gallium metal consumption areas include semiconductors and optoelectronic materials, solar cells, alloys, medical devices, magnetic materials, etc.

From the perspective of global production, China accounts for the highest proportion, with the two substances accounting for 90% and 68% respectively.

From a production point of view, my country currently has a whole industry chain for the production of rare metals, which are closely linked.

For most countries in the world, they do not have a full industrial chain layout.

With the rapid development of gallium's downstream application industries, especially the semiconductor industry and solar cell industry, the demand for metallic gallium will also grow steadily in the future.

This is China's huge contribution to the global economy, which strongly supports the production of various industrial categories such as semiconductors.

Only China in the world can perfectly solve the supply problems of many industrial products based on its huge production capacity and complete industrial system. It is difficult for foreign countries to do so.

China's export controls on gallium and germanium will trigger a global stockpile of gallium and germanium in the short term, causing frantic grabs by relevant companies and driving up prices of related overseas products. The stock price of foreign company AXT has fallen sharply.

However, in the long term, countries other than China will increase the mining of gallium and germanium, reduce their dependence on China, and diversify supply sources.

Possible impacts of export controls include possible price cuts for domestic GaAs substrate epitaxy and raw materials;

Overseas GaAs substrates and raw materials have experienced price increases and are in short supply, increasing pressure on overseas substrate manufacturers.

At the same time, it will have varying degrees of impact on LEDs, OLEDs, power devices, etc., and may increase the production costs of related overseas application products.

Relatively speaking, domestic LED, OLED, power device and other companies can reduce the purchase cost of gallium and improve market competitiveness.

Moreover, most of the gallium and germanium processing equipment, production processes, and patented technologies are in the hands of Chinese companies, and most of the equipment in the production lines are independently developed by the companies.

Therefore, other companies cannot find complete sets of equipment and technology on the market, resulting in high industrial barriers.

Regulations may lead to a longer delivery cycle for new orders from international semiconductor companies. It is expected that consumer electronics and upstream chips may usher in a new round of price increases in the third quarter of 2023.

The domestic substitution window for domestic semiconductor companies and communication equipment companies is expected to be further extended, thereby strengthening their competitive advantages.

For China, this move also means that it can better leverage its own advantages and promote the development of related industries on the premise of ensuring national security.

At the same time, these countries have introduced semiconductor restrictions on China. From the United States to Japan, everything from small chips to large equipment has been included in the scope of control. Domestic semiconductor companies have all their efforts but are unable to use them.

In the long run, with the rise of 5G, Internet of Things, national defense informatization and other application markets, gallium arsenide and gallium nitride semiconductor devices will usher in explosive growth, which will also boost the gallium market.

The original goal of export control is to protect China's mineral resources, and it should be done regardless of whether there is a struggle. However, now there is a greater significance in stabilizing the global supply chain.

The market and raw materials are not only domestic advantages, but also a countermeasure to achieve re-globalization when necessary.

Reference for some information: China Business News: "China controls the export of gallium and germanium. What is the impact on all parties?" ", Bottom-line thinking: "Control the export of gallium and germanium, the pattern must be opened up", Semiconductor Industry Observation: "Two elements, leveraging the globalization of semiconductors"

Recommended reading:

For business cooperation, please add WeChat:

18948782064

Please be sure to indicate:

"Name + Company + Cooperation Requirements"