Chipmakers Gain as China Pauses Gallium Export Curbs Until 2026
The suspension of restrictions on critical semiconductor materials gallium and germanium alleviates significant supply chain pressures that have weighed on the sector for over two years.
The global semiconductor industry received a significant boost as China announced a suspension of its export ban on gallium and germanium to the United States, two metals indispensable for producing high-performance microchips. The restrictions are now paused until November 27, 2026, a move that eases immediate supply chain concerns and sparked a rally in chipmaker stocks.
Shares of major semiconductor firms reacted positively to the news. Intel (NASDAQ: INTC), the $187 billion semiconductor giant, saw its stock climb 6.7% to $39.38 in trading. Texas Instruments (NASDAQ: TXN), a key supplier for the automotive and industrial sectors, rose 2.3% to $177.52. The relief comes after a period of prolonged uncertainty that began in August 2023 when China first placed the strategic materials under export controls, citing national security.
The situation escalated significantly in December 2024 when Beijing imposed an outright export prohibition on gallium, germanium, and other materials to the U.S., as reported by multiple outlets. The initial controls in 2023 had already caused significant price volatility, with gallium prices reportedly surging over 20% as global manufacturers scrambled to secure supply.
Gallium and germanium are critical for a range of advanced technologies. Gallium arsenide (GaAs) and gallium nitride (GaN) are key substrates for radio frequency chips used in 5G base stations and smartphones, as well as for advanced military radar systems. Germanium is essential for fiber-optic communication and infrared camera lenses. China holds a dominant position in the production of these metals, accounting for an estimated 98% of global gallium output, giving its export policies immense sway over the entire tech landscape.
According to reports from November 2025, while the outright ban has been lifted, a strict licensing requirement for exports remains in place. This suggests that while tensions may be de-escalating, Beijing retains significant leverage over the supply of these critical materials. The suspension is seen as a strategic pause rather than a permanent reversal of policy.
The pause provides valuable breathing room for chipmakers who have been actively seeking to diversify their supply chains. Since the initial 2023 restrictions, there has been a concerted push from Western governments and companies to develop alternative sources for gallium and germanium, including increased recycling and investment in mining operations outside of China. While the immediate pressure is off, the episode has served as a stark reminder of the strategic vulnerabilities in the high-tech supply chain.
For now, investors and manufacturers are welcoming the renewed stability. The two-year window will allow companies like Intel and Texas Instruments to better manage inventory and long-term production planning without the immediate threat of a critical material cut-off. However, the industry will be closely watching for any changes in policy as the 2026 deadline approaches, with diversification efforts likely to continue unabated.