Chip industry in Japan bracing for impacts of China's export restrictions on Ga and Ge

As China's export restrictions on germanium and gallium will take effect from August 1, Japan-based semiconductor material manufacturers and fabs are under assessment and expect negative impacts if the measures are prolonged.

According to Japanese media, including Nikkei and Nikkan Kogyo, China's restrictions will impact many Japanese companies as Japan-based companies, including Mitsubishi Chemical and Sumitomo Chemical, have a leading market share in GaN substrates and hold more related patents than their counterparts overseas.

Thanks to the growing market of EVs and communications, global demand for GaN substrates is rising, with Renesas and Nidec researching the user of GaN power devices for EV drive systems.

Kyocera, which bought US-based GaN laser technology provider SLD in 2021, is developing and commercializing the technology. Rohm is on its way to mass-produce GaN power semiconductors for data centers and base stations, which require faster switching speeds than Si-based semiconductors.

Sony Semiconductor Solutions, a subsidiary of Sony, requires gallium to produce sensors and laser devices. Japan-based startup Novel Crystal Technology requires gallium to develop and produce gallium oxide (GaO) substrates and epitaxy. Flosfia also needs gallium for its GaO power semiconductors.

According to the reports, Renesas said it is monitoring the developments, and Sony Semiconductor Solutions said it is gathering information and looking into the potential impacts. Mitsubishi Chemical, which sources gallium from multiple suppliers and has stockpiled a certain inventory level in Japan, is evaluating the consequences. Sumitomo Chemical is collecting data and trying to figure out how to address the issue.

In addition, Dowa Holdings said it had begun looking into the impacts, but concrete response measures have not yet been developed. Nichia, which provides GaN substrates and GaN materials, said its supply to customers would not decrease rapidly after China's export restriction takes effect after August 1, adding that it takes more time to assess the long-term impacts.

Source: China Customs, July 2023

Article translated by Jingyue Hsiao