Beijing is furious with the Biden administration mulling over a broader semiconductor chip export ban and, in response, decided last week to announce export restrictions on two metals, gallium and germanium, which are heavily imported by Western countries for semiconductor production.
The timing of the announcement is one to ponder about. It came days before US Treasury Secretary Janet Yellen's China visit on Thursday. It appears Chinese officials are playing a complex game of chess with the Biden administration as their dominance over rare earth mining and refining, and the lack of that in the West would open up talks with Yellen about future US bans on chips and semiconductor equipment that are critical for China's economic growth.
"China apparently does not like the news that the Biden administration is considering a wider semiconductor chip ban and decided to ban the export of gallium and germanium, which are used in semiconductors, 5G base stations, and solar panels," Louis Navellier, founder of Navellier & Associates, wrote in a recent note to clients.
"Although the US and its allies depend on China for these critical minerals, China needs Western technology such as lithography machines to produce high-performance chips," Navellier said.