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In recent years, the U.S. export control policy against China has attracted widespread attention, among which the control measures on gallium and germanium have attracted much attention.
These two metals are not common in general, but they play a key role in chip manufacturing.
First, let's see what these two metals do.
Gallium and germanium are used as semiconductor materials, and they are the basis for chip manufacturing.
Gallium, in particular, is very important when making high-performance chips because it can improve the performance of transistors.
Without enough gallium and germanium, chip production would be limited, which could have a significant impact on the global semiconductor industry.
China has chosen to regulate these two metals because of its strong production capacity in both sectors.
China accounts for 95% of the world's gallium production and 60% of germanium, which means that China holds the key to the global semiconductor materials market.
By restricting exports of gallium and germanium, China could influence the U.S. supply chain, putting significant pressure on the U.S. semiconductor industry.
In addition, the United States has repeatedly imposed restrictions on China's acquisition of semiconductors on the grounds of "national security".
China's countermeasures are not only in response to US policy, but also in defense of its own national interests.
In international trade, countries are vying for market share, and China's move is aimed at protecting its own market and ensuring that its companies have more opportunities to grow.
This situation has also had an impact on the US chip giants.
In the case of NVIDIA, the Chinese market is very important to it, accounting for 90% of its global market share.
In order to continue to make profits in the Chinese market, Nvidia had to sell low-performance castrated chips to China, which are weaker in performance but at a relatively low price, in line with the needs of the Chinese market.
However, China is not only able to produce these chips on its own, but also at a more competitive price.
And for Huawei, it used to rely on Nvidia chips, but U.S. export controls changed everything.
The United States directly banned the sale of A100 chips of the same level, which forced Huawei to be more self-reliant in the field of chips
Chip orders in the Chinese market are concentrated in Huawei's hands, which provides more funds and opportunities for Huawei's R&D, making it emerge in the global chip field.
It is worth noting that the attitude of Chinese companies has also changed.
In the past, some Chinese companies might have bought Nvidia's castrated chips, but now, almost all first- and second-tier Internet companies have stopped cooperating with Nvidia.
Downstream enterprises have also actively mobilized to accelerate the reconstruction of a large number of operators in the Ascend ecosystem.
Instead of stopping Chinese companies from developing, U.S. sanctions have provided them with new opportunities.
This situation reveals the tenacity and innovative spirit of Chinese enterprises.
They are no longer willing to accept Nvidia's castrated chips because of their low performance and high price.
Instead, they prefer to invest in their own R&D to develop smarter chips, which will make them more competitive in the global market.
Finally, it is worth mentioning the itinerary of Nvidia's senior leader Jensen Huang to China.
The visit could be Nvidia's response to the future of the Chinese market.
Although the Chinese market accounts for 20% of Nvidia's revenue, it is at risk of losing this important market due to various restrictions.
To sum up, although the control measures of gallium and germanium metal seem to have nothing to do with the chip market on the surface, they actually involve global trade and the major interests of the semiconductor industry.
Behind this seemingly obscure topic lies an interweaving of international politics, economic wisdom, and market competition, each of which could change the landscape of the future.
What do you have to say about this? Feel free to leave your thoughts in the comment section!