China has proclaimed that all rare earths and resources on its land belong to the state. The new ruling, which is set to go into effect on 1 October, will serve broad and sweeping changes over the way minerals and rare earth supplies will be shipped the world over.
China’s decision to instil the new regulation is believed to be a response to the ongoing sanctions and US export rules, restricting Chinese access to advanced wafer fab equipment that are required to make chips at sub 14nm and 16nm processes. The country’s government says that the move is aimed at safeguarding its industrial interest against international pressures.
The new ruling on rare earths is likely to impact the global chip manufacturing industry; China is one of the largest producers and providers of Gallium and Germanium and already have restrictions on them since July last year. Both metals aren’t technically scarce and are abundant, but more importantly, this means that suppliers in the country have been able to sell them cheaply.
With the metals relegated property of the state, chip manufacturers and plants may have to look for alternative sources of the metals, and there is no guarantee that they’ll be able to secure a steady flow for just as cheap. More than Gallium and Germanium, China also produces 70% of the world’s rare earths elements, which are essential for the production of various electronic components.
(Source: Nikkei, Tom’s Hardware)
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