China slows exports of germanium and quartz to Taiwan, affecting semiconductor and optics supply chains

Export Delays Impact Taiwan

China is slowing down or restricting shipments of materials containing germanium and quartz to Taiwan. This has led to supply constraints for various industries on the island, according to Nikkei. Companies are reporting difficulties in obtaining these materials, as well as permanent magnets, from Chinese suppliers due to extended customs procedures, causing some Taiwanese manufacturers to lose orders while awaiting clearance.

China's Export Control Regime

China implemented export controls on germanium in 2023 and on quartz in late 2024. Under this regime, exporters must disclose the customer and intended end-user, allowing Chinese authorities to monitor and control the supply chain. The Ministry of Commerce can approve, reject, or delay shipments, which is reportedly occurring with current exports to Taiwan.

Targeted Restrictions

The delays appear to be selective rather than a blanket slowdown across all germanium, quartz, and magnet exports to Taiwan. While these materials have broad industrial applications, reports specifically link germanium and quartz to optics/photonics and semiconductor manufacturing, and permanent neodymium magnets to the aerospace industry for robotics. Sources for this information are from optical technology, semiconductor equipment, and aerospace companies in Taiwan, suggesting targeted restrictions on specific verticals within the island.

Strategic Implications

This situation suggests China is applying selective friction through its dual-use export-control regime. By examining material, buyer, end-user, and shipment details, Beijing can potentially slow strategically sensitive supply chains, such as optical connectivity for data centers, while allowing less sensitive trade to continue. China controls approximately 63% of the global germanium supply.