China Produces About 99 Percent of the World’s Raw Gallium, the Metal Hidden Inside the Radio Chips of Almost Every Smartphone, and in Late 2024 It Banned Exports of It to the United States as the Chip War Escalated

Why It Matters

The move sharpens the geopolitical tug‑of‑war over critical minerals, threatening U.S. semiconductor and defense supply chains and inflating gallium prices by over 150%.

Key Takeaways

• China supplies ~99% of global primary low‑purity gallium.
• December 2024 export ban targets gallium, germanium, antimony to U.S. military.
• U.S. gallium price could rise >150% and cut $3.4 bn output.
• Kazakhstan plans up to 15 t/yr gallium from 2026, still tiny share.
• Licensing regime, not ban, now controls U.S. gallium flow until Nov 2026.

Pulse Analysis

Gallium’s niche but vital role in high‑frequency radio‑frequency front‑ends makes it a linchpin for next‑generation smartphones, 5G infrastructure, and advanced defense systems. Unlike copper or silicon, gallium is not mined directly; it is a by‑product of aluminium and zinc refining, which has allowed China to dominate production by subsidizing low‑cost output and edging out competitors in Germany and Kazakhstan. The December 2024 export prohibition, aimed specifically at U.S. military end‑users, escalated an already tight licensing regime, signaling Beijing’s willingness to weaponize a mineral that underpins critical communications and radar technologies.

For U.S. manufacturers, the ban translates into immediate cost pressures and strategic uncertainty. The U.S. Geological Survey estimates that a full Chinese cutoff could lift gallium prices by more than 150% and shave roughly $3.4 billion from the nation’s economic output, while defense contractors face heightened scrutiny over sourcing. Although direct shipments have been near zero since August 2023, trade data shows that some material still reaches the United States via third‑country transits, softening the practical impact but preserving the strategic message. The current licensing framework, which now governs all exports, gives Beijing discretionary power to prioritize allies or restrict supply to adversaries, creating a volatile procurement environment for chipmakers and defense firms.

Looking ahead, the temporary suspension of the outright ban until November 2026 offers a narrow window for alternative supply development. Eurasian Resources Group’s $20 million investment in Kazakhstan aims to produce up to 15 tonnes of gallium annually by late 2026—still a fraction of China’s 750‑tonne output but a potential foothold for diversification. However, scaling such projects will require sustained capital and market incentives, especially as China continues to tighten export‑control lists on gallium extraction technologies. Until a robust non‑Chinese supply chain materializes, U.S. firms remain dependent on Beijing’s licensing decisions, making policy shifts and geopolitical negotiations the key levers for securing this critical mineral.