The Hidden Chokepoint of the Semiconductor Economy: Why China Still Owns Gallium and Germanium

Highlights

• China produced an estimated 900,000 kg of primary gallium in 2025 and dominates germanium refining, giving Beijing enormous leverage over global semiconductor supply chains.
• Beijing's layered export controls since July 2023, including a U.S.-specific ban in December 2024, have driven germanium prices to $5,380/kg in Europe and raised U.S. gallium import costs by 30% year over year.
• Key U.S. alternatives remain years from commercial scale, including Blue Moon Metals' Apex Mine redevelopment in Utah, 5N Plus germanium wafer expansion, and ElementUSA's Louisiana gallium facility.
• The core bottleneck is not geology but the absence of integrated midstream refining, purification, and downstream qualification capacity outside China.
• America's semiconductor and defense sectors depend on a fragile network of allied processors in Canada, Belgium, Germany, Japan, Greece, and Kazakhstan until domestic capacity is built and qualified.

Gallium and germanium are rarely mined as stand-alone commodities. Gallium is recovered primarily as a byproduct of bauxite-to-alumina refining, with smaller volumes extracted from zinc-processing residues, while germanium is recovered mainly from zinc-processing residues, germanium-rich coal ash, and recycled scrap. That byproduct nature is the defining challenge of both supply chains: even when prices surge, production cannot expand rapidly unless alumina refineries, zinc smelters, or coal-processing circuits also increase recovery capacity. According to the U.S. Geological Survey, China accounted for essentially all estimated global primary low-purity gallium production in 2025—about 900,000 kilograms—and remained the dominant player in germanium refining alongside a small number of processors in countries such as Belgium, Canada, Germany, and Russia. U.S. demand for both materials is concentrated in high-value technologies. Germanium is used primarily in fiber-optic networks, infrared optics, space solar cells, semiconductors, and radiation detectors, while gallium is indispensable for compound semiconductors used in integrated circuits, RF electronics, power devices, LEDs, lasers, and other optoelectronic applications.

Germanium Landscape

The “map” of upstream germanium starts with China, Russia, the United States, Canada-linked processing, and the Democratic Republic of the Congo (DRC). In China, the key source districts are Yunnan and Inner Mongolia: Yunnan Chihong Zinc & Germanium (opens in a new tab) recovers germanium from the Huize and Yiliang lead-zinc-silver mines and produced 65,900 kg of germanium products in 2023; Yunnan Lincang Xinyuan (opens in a new tab) Germanium mines the Lincang lignite deposit and produced 47,700 kg. Russia’s chain includes Germanium and Applications at the Pavlovskoye coal field (opens in a new tab) and JSC Germanium’s Krasnoyarsk refinery (opens in a new tab). In North America, Teck Resources Limited (Teck (opens in a new tab)) recovers germanium from zinc concentrates from Red Dog in Alaska (opens in a new tab) and refines them at Trail, British Columbia (opens in a new tab). In the DRC, Gécamines (opens in a new tab) began shipping germanium concentrates from Lubumbashi (opens in a new tab) to Umicore (opens in a new tab) in Belgium in 2024. Midstream refining is concentrated in China, Belgium, Canada, Germany, Russia, and the United States; key named processors are Teck (Trail), Umicore (Olen (opens in a new tab), plus Quapaw, Oklahoma), JSC Germanium, and the two large Yunnan producers.

Downstream, publicly disclosed “buyers” are less transparent than processors, but the demand centers are clear. By nation, the main visible buying/manufacturing hubs are Russia, Belgium, Germany, and Japan in Chinese export data, and the U.S., Japan, and Europe in end-use manufacturing. By industry, fiber optics is the largest pull; Prysmian (opens in a new tab) explicitly buys germanium tetrachloride from Umicore for optical fiber, and Sumitomo Electric (opens in a new tab) is a major optical-fiber manufacturer. Infrared optics is the second pillar, with Coherent selling germanium optics and 5N Plus (opens in a new tab) producing germanium wafers for infrared and EO/IR applications. Space solar is another high-value pull: 5N Plus says its germanium wafers are vital for solar cells powering commercial and national-security satellites.

Gallium Landscape

Gallium’s upstream map is even more concentrated. China dominates primary output through alumina and aluminum-linked plants; Chinalco (opens in a new tab) is a major producer with three gallium plants and 146 metric tons of output in 2022, alongside Shanghai-based East Hope, Zhuzhou Keneng (opens in a new tab), Zhuhai SEZ Fangyuan Inc., and Xiaoyi Xingan. Outside China, existing primary low-purity output is small and concentrated in Japan and Russia, with new projects emerging rather than operating at scale. The important midstream expansions are METLEN (opens in a new tab) in Greece, targeting 50 metric tons per year; Rio Tinto with Indium Corporation, which extracted first gallium from feed at the Vaudreuil alumina refinery (opens in a new tab) in Quebec and is targeting up to 40 tonnes annually if commercialized; and ERG in Kazakhstan (opens in a new tab), which plans up to 15 tonnes per year from bauxite processing. In the United States, Indium runs the main visible high-purity recovery/refining node in New York, while ElementUSA (opens in a new tab) is developing a Louisiana demonstration plant to separate and purify gallium from industrial waste.

Downstream gallium demand is led by compound semiconductors and optoelectronics. U.S. gallium demand is dominated by integrated circuits and optoelectronic devices. Identifiable corporate demand centers include Qorvo (opens in a new tab), which makes GaAs and GaN devices for defense, telecom, and space; Skyworks, which says it relies on foundries to supplement gallium-arsenide wafer capacity; MACOM, which is scaling GaN-on-SiC; Sumitomo Electric, which describes itself as the world’s largest manufacturer of gallium arsenide and a major GaN supplier; Nichia, which says high-purity gallium is used in LEDs, laser diodes, GaAs, and GaN substrates; and ams OSRAM (opens in a new tab) in InGaN lasers. By nation, that points to the U.S., Japan, South Korea/Taiwan, and Europe as the main consuming/manufacturing hubs, even where merchant buying data are opaque.

China export policy and why supply is harder

China’s policy has tightened in layers. Beijing introduced export licensing for gallium- and germanium-related items in July 2023 on national-security grounds (opens in a new tab); exports were not formally banned, but licenses became mandatory. In practice, exports fell sharply after August 2023, and China then imposed a U.S.-specific ban in December 2024. In November 2025, China suspended that U.S. ban for one year, through November 27, 2026, but licensing controls remained. Supply is therefore still harder to secure because buyers face permit risk, longer lead times, material tracing requirements, thin inventories, and a non-Chinese supply base that is either recycling-based or still in development. Prices suggest so: 2025 average germanium metal prices at $4,100/kg, with European prices reaching $5,380/kg by October 2025, while U.S. gallium import unit values rose about 30% year over year in 2025. Some traders report current U.S. prices between $2,500 to $4,000 per kg.

U.S. projects and strategic implications

Canada-based Blue Moon Metals (opens in a new tab) is now central to the U.S. narrative. In February 2026 it agreed to acquire 100% of the past-producing Apex mine in Utah from Teck; Apex is not in production, and Blue Moon is still evaluating redevelopment, metallurgy, permitting, and a possible new processing line at its Springer complex in Nevada. Historically, Apex was the primary U.S. producer of gallium and germanium in the 1980s and 1990s. Blue Moon’s separate California zinc-copper-gold-silver project is 100%-owned, advanced-stage, under underground development, and forecast for production in 2028, but it is not itself a germanium-gallium mine.

Other U.S. strategic nodes are 5N Plus in St. George, Utah (opens in a new tab), now expanding germanium wafer capacity; Indium in Rome, New York (opens in a new tab), scaling recycled gallium recovery; and ElementUSA’s Louisiana gallium/scandium project (opens in a new tab). The strategic conclusion is simple: for both minerals, the bottleneck is no longer geology alone; it is the speed at which non-Chinese refining and downstream qualification can be built.

REEx Reflection

The United States is making measurable progress toward supply-chain resilience for gallium and germanium, but it remains several years away from anything approaching self-sufficiency. The challenge is structural rather than geological: neither metal is typically mined as a primary commodity, but recovered as a byproduct from alumina, zinc, coal, or recycling streams, meaning higher prices alone cannot rapidly unlock new supply.

While promising projects are emerging as cited above—including the redevelopment of the historic Apex Mine in Utah by Blue Moon Metals, expansion of germanium wafer production by 5N Plus in Utah, Indium Corporation's domestic gallium refining initiatives in New York, ElementUSA's planned Louisiana gallium facility, and Rio Tinto's gallium recovery work in Quebec—most remain in development, pilot-scale, or early commercialization.

The United States still lacks an integrated mine-to-metal-to-semiconductor ecosystem comparable to China's. And this should be quite familiar to Rare Earth Exchanges readers who follow the rare earth element supply chain challenges. Even if upstream feedstock becomes available, the country must still expand refining, purification, metallization, wafer production, and downstream qualification for demanding defense, aerospace, fiber-optic, infrared, and semiconductor applications—a process that typically requires years of engineering, customer qualification, and regulatory approvals.

Consequently, America's greatest vulnerability is no longer simply access to mineral resources but the absence of sufficient commercial-scale midstream processing capacity. Until these facilities are built and qualified, the U.S. will continue to rely on a fragile network of allied processors in Canada, Belgium, Germany, Japan, and increasingly Greece and Kazakhstan, while China retains significant leverage through its dominant refining position and export licensing regime.

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