China’s recent decision to restrict gallium exports has resulted in a frenzy of hoarding speciality semiconductor wafers built from this metal. The unexpected news has an impact on Freiberger Compound Materials, the biggest consumer of gallium, because the company relies significantly on Chinese suppliers to meet its gallium needs for manufacturing wafers used in mobile phone radio signal amplifiers and optical circuits.

Freiberger Compound Materials is in turmoil as a result of China’s unexpected announcement to prohibit the export of gallium and germanium goods beginning August 1. As a big consumer, the corporation consumes 10% of the world’s gallium output.

With annual sales of $77-$88 million and a market share of 65 percent in the market for gallium arsenide wafers for smartphone power amplifiers, Freiberger competes against smaller Chinese manufacturers and the Japanese firm Sumitomo Electric.

According to Reuters, Michael Harz, CEO of Freiberger Compound Materials, expressed concern about the present industry position, adding that it has caused significant disquiet among their clientele. As a result, there has been an increase in the number of orders submitted to increase inventory levels. He went on to say that the company now has several months’ supply of gallium on hand since it has long anticipated some sort of trade crisis and has little else it can do to respond.

China to impose dominance through export control

According to some mineral specialists, China’s plan to impose curbs on gallium and germanium might disrupt the supply chain for automakers. This comes as the auto industry is still recuperating from the global semiconductor shortage caused by the epidemic, which led automakers to halt manufacturing of some models.

Over the last 10 years, Chinese gallium firms have driven out the majority of competitors by undercutting them on price, causing automakers to be concerned about their reliance on a metal that has been hailed as a game changer for electric vehicles.

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