Week 2 : Potential chip shortage on the horizon



 Last year, in August 2023, China placed a restriction on the shipment of germanium and gallium. Because of that, the price of the material has almost doubled in Europe. Germanium and gallium are both important materials used to manufacture any sort of chips. Gallium is used to produce gallium nitride, which can handle higher amounts of power than silicon.  Germanium is used to make high-speed transistors.

It is said that China produces 98% of the World's supply of gallium and 60% of germanium. The restrictions placed on these materials are retaliation due to geopolitical issues involving the Netherlands, which has similar restrictions with support from the US.

The two materials are vital to manufacturing effective and efficient chips for the computer. Suppose China continues its stubbornness on the restriction on those materials. In that case, western countries can face serious issues, which can lead to chip shortages or jacking up the price of those materials. 

Source: https://www.datacenterdynamics.com/en/news/chinese-export-controls-on-gallium-and-germanium-could-lead-to-chip-shortages-report/ 

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