China is trying to limit the production of chips by Western countries
Category
Economics
Publication date

China is trying to limit the production of chips by Western countries

China
Source:  Financial Times

The Chinese government has introduced export controls on semiconductor materials used in the production of microcircuits by Western countries, as well as military optical devices.

Points of attention

  • China's export controls on key semiconductor materials are affecting supply chains and raising concerns about declining production of advanced chips by Western countries.
  • The restrictions on germanium and gallium imposed by China are leading to increased mineral prices in European countries, prompting disruptions in microcircuit production by Western companies.
  • China's actions demonstrate a strategy to protect national security interests and respond to Western controls on chips and technology, potentially impacting global chip and technology manufacturing markets.
  • The limitations on gallium and germanium supply may result in shortages in the mineral market, affecting production and supply stability for various industries including military and communication equipment.
  • Export controls by China could have far-reaching consequences on the global chip and technology manufacturing landscape, not limited to markets within China, thus highlighting Beijing's dominance in key resource supplies.

What is known about the consequences of China's introduction of export controls on the supply of semiconductors to the West

The restrictions imposed by China are said to be affecting supply chain logistics and fueling concerns that the production of advanced chips by Western countries will decline.

It is emphasized that the restrictions imposed by China on the supply of germanium and gallium to Western countries have already led to an increase in the prices of these minerals in European countries almost twice during the last year.

Semiconductors and components of military and communication equipment are made from these minerals.

Beijing imposed the restrictions last year, saying they protect "national security and interests" in response to US restrictions on the sale of advanced chips and chip-making equipment.

Journalists of the publication note that the introduction of restrictions and the introduction of export controls emphasize Beijing's dominance in the global supply of dozens of the most important resources.

According to the US Geological Survey, China produces 98% of the world's supply of gallium and 60% of germanium.

China disrupts chip production in the West
Germanium

The situation with China is critical. We depend on them - a representative of the company, which is a large consumer of semiconductor materials, explained to the journalists of the publication.

Analysts point out that the Chinese government is demonstrating its intention to limit the economic interests of Western countries.

The goal is to strike back at China's control over access to cutting-edge chips and other advanced technologies.

According to a representative of one of its Western companies, already affected by China's restrictions on exports of semiconductor materials, although some large shipments of Chinese gallium are still being made, overall exports have fallen by about half since the controls were introduced.

If China reduces gallium exports, as it did in the first half of the year, our reserves will be used up and a deficit will arise, the company's representative emphasizes.

Jan Giese, senior manager of base metals at Frankfurt-based trader Tradium, notes that export controls add extra stress to anything outside of China, and another level of complexity for markets that are already difficult to navigate.

What consequences did China's restrictions on the supply of semiconductor materials lead to?

The authors of the material indicate that germanium and gallium are key semiconductor materials for the production of modern microprocessors, fiber optic products and night vision goggles.

Further restrictions on the supply of these minerals by China in general may provoke a disruption in the production of microcircuits by Western companies.

In August, Chinese authorities also announced restrictions on the supply of antimony, a mineral used in the production of armor-piercing munitions, night vision goggles and precision optics.

Before that, Beijing introduced export controls on the export of graphite and technologies used for the extraction and separation of rare earth elements.

Traders note that under the conditions of control over gallium and germanium, each individual batch needs approval - from 30 to 80 days.

This leads to the fact that long-term contracts for the supply of these resources become unreliable.

Applications must specify the buyer and intended use.

Corey Combs, deputy director of Beijing-based consultancy Trivium China, said Beijing's main motivation was to "send signals" that it could respond to US pressure on Chinese companies and vital industries.

Beijing also views export controls in part as a way to ensure its own supply of materials used in the clean energy technologies that underpin the country's industrial modernization, Combs said.

Category
Ukraine
Publication date

Ramstein-25. Participants approved roadmaps for Ukraine's strategic goals

Rustem Umerov
Ramstein-25

As part of the work of the Contact Group on Defense Issues of Ukraine, on January 9, 8 roadmaps were approved, which define the key goals of the Defense Forces of Ukraine until 2027.

Points of attention

  • Approval of 8 roadmaps defining Ukraine's Defense Forces strategic goals until 2027 at the Ramstein-25 meeting.
  • Focus on scaling up drone production to enhance security and deter potential threats in the region.
  • Call by President Zelenskyy for active participation in building Ukraine's drone arsenal for military purposes.
  • Emphasis on providing military assistance, procurement organization, and development of the defense industry in Ukraine.
  • Importance of investments in the Ukrainian drone industry due to the nation's expertise and capabilities in drone production and usage in Europe.

Plans for supporting Ukraine for 2 years agreed at Ramstein-25

This was announced by the Minister of Defense of Ukraine Rustem Umerov.

It is noted that the coalition roadmaps define Ukraine's strategic goals until 2027 and become the basis for medium-term and long-term support.

Our main task is to balance the urgent needs of our army during the war with the long-term development goals of the Ukrainian Defense Forces.

Thus, Ukraine, together with its partners, has identified the main areas of work, including providing military assistance, organizing procurement, attracting investments, and supporting the Ukrainian defense industry and its development.

Umerov explained that the roadmaps are a joint result of the work of Ukraine and partners.

Zelenskyy promised to scale up drone production at Ramstein

Unmanned aerial vehicles allow us to deter the enemy and keep him at a distance. This year, Ukraine plans to set a record in the number and quality of drones.

President Volodymyr Zelenskyy said this during a meeting of the Contact Group on Defense Issues of Ukraine in the Ramstein format.

According to Zelensky, today the production of drones in Ukraine is more efficient than anywhere else.

This year, we in Ukraine want to set a record in the quantity and quality of drones we produce and receive from our partners. And we are focusing on the drones that our brigades need to hold the front lines.

Volodymyr Zelenskyy

Volodymyr Zelenskyy

President of Ukraine

Zelenskyy clarified that this also includes drones that Ukraine needs to ensure security: naval drones, as well as unmanned aerial vehicles for long-range destruction of military facilities and enemy infrastructure.

We have already signed a significant number of contracts and many are still being worked on. And I urge all of you to be more actively involved in building up the drone arsenal. Ukrainians have the most experience in Europe in using drones and we also have the greatest capabilities in Europe to produce drones. So invest more in this Ukrainian force. Because after the war, it will also become your force.

Category
Ukraine
Publication date

Russian airstrikes on Kherson. The number of casualties has increased

Roman Mrochko
Kherson

On January 9, airstrikes by Russian troops in Kherson damaged 39 residential buildings, a higher education institution, and bombs fell on private homes and a kindergarten. The number of victims has increased to ten.

Points of attention

  • Russian airstrikes in Kherson on January 9 caused extensive damage to civilian infrastructure, including 39 residential buildings and a higher education institution.
  • The number of casualties in Kherson has increased to ten, with victims sustaining injuries from the bombings carried out by Russian troops.
  • The Russian aviation attack on Kherson involved dropping 4 KAB aerial bombs, resulting in widespread destruction and injuries to civilians in the city.
  • Police investigation teams, explosives technicians, patrol officers, rescuers, and medics were actively involved in responding to the aftermath of the airstrikes in Kherson.
  • The severity of the situation was highlighted by the Kherson Region Prosecutor's Office reporting five hospitalized victims, emphasizing the impact of the Russian airstrikes.

10 people injured in Kherson as a result of Russian airstrikes

This is reported by the Kherson region police.

Today at around 11 a.m., Russian troops launched airstrikes on Kherson. Russian war criminals dropped four bombs on the city.

Kherson after Russian airstrikes

It is noted that the bombs fell on private homes, a kindergarten, the territory of a factory, and a maintenance station. 39 residential buildings and a building of a higher education institution were also damaged.

Police investigation teams and explosives technicians, patrol officers, rescuers, and medics worked at the scene of the attacks.

Kherson after Russian airstrikes

Also, the head of the Kherson MVA, Roman Mrochko, published a video from the site of a guided bomb hitting private houses.

At 11:00, another woman in Kherson was injured as a result of enemy shelling. The 65-year-old victim was treated on the spot by medics. She suffered a concussion, explosive and closed head injuries, and a right shoulder injury. The woman was in the house at the time of the attack.

Russian aviation attacked Kherson

On January 9, Russia dropped 4 KAB aerial bombs on Kherson, causing extensive destruction of civilian infrastructure and a large number of injuries.

According to the head of the Kherson OVA, Oleksandr Prokudin, the Russian occupiers attacked residential areas of the city with aircraft in the middle of the day.

Residential buildings were destroyed, the blast wave broke out gates, window frames, and panes, ceilings and walls collapsed, and people's property was destroyed.

The Kherson Region Prosecutor's Office noted that five victims are currently known to have been hospitalized.

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