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Review
Do you know what is the key raw material of the touch screen of a mobile phone? Yes, it's indium. This metal may seem obscure, but it is a key component of modern electronic devices.
If China regulates the supply of indium, global tech giants such as Apple will face a huge supply chain crisis, and iPhone production will inevitably be affected. So, what exactly is indium? Why is it so important?
Unique properties of indium
Indium is a silvery-white soft metal with good electrical and thermal conductivity, and is widely used in the manufacture of high-tech products such as touch screens, liquid crystal displays, and solar cells. One of the main uses of indium is to make indium tin oxide (ITO), which is the core material of modern touch screens, providing high transparency and electrical conductivity.
The application of the ITO layer on the touch screen, which can keep the screen transparent and have good touch performance, is the core component of smartphones and tablets.
In addition, indium has important applications in low-temperature welding, sealing, and thermal interface materials. Indium's low melting point makes it an ideal material for welding high-precision electronic components, while indium's high thermal conductivity in thermal interface materials can effectively dissipate heat and improve the performance and stability of electronic devices.
Although indium is not low in abundance in the earth's crust, its annual production is relatively small. This is mainly because indium is mostly extracted as a by-product of metals such as zinc, lead, and copper. According to the U.S. Geological Survey, global indium refining production in 2023 was about 650 tons, with China accounting for the lion's share.
China dominates indium production and refining, controlling more than half of the global indium market. This monopoly position gives China a great say in the international market. If China decides to restrict indium exports, global electronics manufacturing will suffer a major blow.
The strategic importance of indium
Indium's strategic importance lies not only in its widespread use in high-tech products, but also in the fragility of its supply chain. As the main source of indium is concentrated in China, geopolitical tensions or export restrictions will seriously affect the global supply of indium.
The Chinese government's increasingly stringent management policies on rare metal resources aim to protect domestic resources and the environment while increasing the added value of the industrial chain. As early as the 90s of the 20th century, China listed rare metals as a strategic resource, banned foreign investment in the field, and regulated production and export through a series of tax and export control measures.
In recent years, the Chinese government has paid more attention to the sustainable development of the rare metal industry, and has introduced a number of policies to improve resource utilization and environmental protection.
For example, China's 14th Five-Year Plan, proposed in 2021, emphasizes the development of high-value-added rare metal functional materials and high-performance alloys. These policies not only solidify China's dominance in the global rare metals market, but also make indium's supply chain more vulnerable.
Over the past 20 years, China has mined more than 21,000 tonnes of indium from the earth's crust, but due to technical barriers and imperfect market pricing mechanisms, large quantities of indium are exported at low prices, while indium tin oxide targets are imported at high prices. This situation has led to restrictions on China's pricing power and voice in the global indium market.
If China can improve the recycling rate at the primary production stage, overcome the technical barriers of the midstream industry chain, and establish an efficient recycling system, it will greatly improve the sustainable development of indium resources.
The impact of indium supply disruptions on tech giants
If China restricts indium exports, indium-dependent tech giants such as Apple will face huge challenges. Touchscreens are a core component of devices such as smartphones and tablets, and indium tin oxide is an indispensable material for touchscreens. Once the supply of indium is interrupted, the production of touch screens will be severely affected, which will affect the production of the entire equipment.
Companies such as Apple may be forced to find alternative materials or new sources of supply for indium. However, the unique physical and chemical properties of indium make it extremely difficult to find alternative materials. For example, indium tin oxide provides high transparency and electrical conductivity, and no other material can completely replace its function.
In addition, developing new sources of supply requires time and significant investment, which will further drive up production costs. Apple may need to invest significant resources in R&D and supply chain adjustments, which not only adds to production complexity, but can also delay product launches and time to market.
Not only that, but the indium supply disruption will also affect other indium-dependent industries, such as emerging industries such as solar and LED lighting. The demand for indium in these industries is growing, and any supply chain fluctuations can have a profound impact on their development.
According to a study in the journal Sustainability, China's indium export restrictions will lead to a sharp rise in indium prices on the global market, affecting all indium-dependent high-tech industries. This will lead to an increase in costs for downstream enterprises, which will eventually be passed on to consumers, affecting the overall competitiveness of the market.
conclusion
Indium, a strategic metal rarer than gold, is not well known, but it plays a vital role in the modern high-tech industry. China's control over indium supply not only strengthens its influence in the global market, but also exposes the global technology industry to potential supply chain risks.
For tech giants such as Apple, ensuring a steady supply of indium is crucial. In the future, countries need to find new countermeasures to ensure the balance between resource supply and industrial development to cope with the challenges that may be brought about by the disruption of indium supply.
By understanding indium's unique properties and its important applications in high-tech products, we can better understand its strategic position in the global supply chain.
At the same time, recognizing the vulnerabilities and potential risks of supply chains can help countries formulate more effective resource management and industrial policies to ensure the sustainable and healthy development of high-tech industries.
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