US firm AXT says China unit has initial export permits for key chipmaking metals

BEIJING (Reuters) – U.S. semiconductor wafer maker AXT Inc said its Chinese subsidiary Beijing Tongmei had received initial export permits for shipping gallium arsenide and germanium substrates – compounds key to chipmaking – to certain customers.

Tongmei will continue to work to obtain permits for additional customers, it said in a statement on Wednesday.

California-headquartered AXT, which has manufacturing facilities in China, said in July that it would seek permits to keep exporting gallium and germanium substrate products from China after Beijing abruptly announced it would impose export controls on the niche metals from August.

The controls mark the latest salvo in an escalating war over access to high-tech microchips between China and the United States, and come as Washington considers new restrictions on the shipment of high-tech microchips to China.

China’s Ministry of Commerce said on Thursday that some Chinese companies had obtained export licences for gallium and germanium products, with more still being reviewed.

This came after China’s exports of germanium and gallium items plunged in August, the first month of the export controls´╝îcustoms data showed on Wednesday.

China exported no wrought germanium products last month, compared to 8.63 metric tons in July when volumes more than doubled from June as overseas buyers rushed to lock in supply ahead of the curbs.

There were also no exports of wrought gallium products in August, compared to 5.15 tons in July and 7.67 tons in August in 2022, the data showed.

China’s exports of wrought germanium totaled 36.48 tons in the first eight months of 2023, up 58% on the year, while shipments of wrought gallium fell 58% on the year to 22.72 tons over the January-August period.

(Reporting by Amy Lv and Dominique Patton in Beijing; Editing by Tom Hogue and Stephen Coates)