China has implemented restrictions on two crucial raw materials, gallium and germanium, materials used in batteries and microchips, among other things. Lately there has been buzz in media about how these new restrictions will affect the industry and might cause disruptions in the supply chains. We wondered what our COO Raymond Goh think about this situation and asked for his opinion.
“In my opinion, there will not be an immediate or direct impact on the PCB production, but we might see some effect that will slow down the PCB demand in the next year”, says Goh.
Some says this is a tit for tat situation. The USA had imposed restrictions to export chips to China. China now restricts export of the raw material that are used to produce chips – germanium and gallium. China produced over 60% of global output. Imposing such restriction will most probably cause a short-term shortage and increase the cost for chips.
“For the ordinary consumer, we will feel the impact of rising cost of high-tech electronics products. For the demand of PCB, it may be affected when availability of the chips to assemble them are limited. However, over time, the situation would gradually balance itself. As in such a situation, there will be more willingness of the manufacturers to use alternatives, and they will also increase the effort to recycle, to continue supplying the chips that are required by most electronics”, Goh concludes.
China is not the only producing country of these materials. Finland, Canada, Russia and USA produce germanium, while Japan, South Korea, Germany and Russia have gallium production. These smaller producers will gain benefits and increase production over time.
Do you have concerns about you PCB supply chain or interested in learning more about how we support our customers various demand on technologies, materials or supplying sources? Reach out and we will enlighten you on how we protect and secure our partners supply chains.