China Places Export Controls On Raw Materials Used In Semiconductor Manufacturing

On July 3, 2023, the PRC Ministry of Commerce ("MOFCOM") and the General Administration of Customs ("GAC") announced the implementation of export controls on gallium and germanium items, effective August 1, 2023 (the "Announcement").¹ The Announcement appears calculated to respond to semiconductor-related export controls imposed by the U.S. and its allies since 2022. In the near term, companies that obtain gallium- and germanium-based items from China should prepare for potential supply chain disruptions.

ELEMENTS OF AN APPLICATION FOR A LICENSE UNDER THE NEW CONTROLS

Pursuant to the Announcement, after August 1, 2023, certain gallium and germanium items, listed by customs commodity numbers, cannot be exported from China without a license for the export of dual-use items and technologies issued by the provincial-level MOFCOM. The license application requires the exporter to provide (i) the agreement between the parties; (ii) technical description of the item;