Germanium Countdown: Only 22 Days Until Export Controls!
Only 22 days remain until August 1st, from which point the export of the semiconductor metal germanium will also require approval in China. With a global annual production of 225 tons (2022), this is even scarcer than gallium, which stands at 550 tons. At the same time, the technology metal forms the bottleneck for two central technological developments: the semiconductor industry and fiber optic expansion.
New Chip Act
This Tuesday, the EU confirmed its new Chip Act. Under this framework, the union is providing 43 billion euros to double the EU’s share of global semiconductor production capacity from currently under ten percent to more than 20 percent. 3.3 billion euros alone will flow into semiconductor technology research. As a semiconductor metal, germanium plays a central role in their development. Additionally, it replaces the previously used silicon in the latest generation of transistors.
"Defense Metal"
As part of semiconductor chips, germanium is also an essential component of the defense industry in European countries. Due to its optical properties, it is also used in this sector as a material for military night vision devices, infrared cameras, and telescopic sights. If China limits the export of this semimetal, it would have direct implications for the defense capabilities of free countries.
50 Billion Euros for Fiber Optics
Another political initiative for which germanium is indispensable is the Gigabit Strategy announced in March 2022 by Digital and Transport Minister Volker Wissing. This aims to replace the existing copper lines and telephone cables with fiber optic connections in at least 50% of German households by 2025. This amounts to tripling the already existing fiber optic connections. According to Wissing, the telecommunications industry will invest 50 billion euros in the project. The goal is to have all homes connected by 2030. The government aims primarily to improve the sometimes disastrous situation in Germany’s more rural areas.
Fast Downloads Through Optical Signals
Fiber optics provide significantly more performance compared to DSL. The previously used DSL had 16 megabits per second, with the currently common VDSL we use 500 megabits. A current fiber optic connection is approximately 1,000 megabits per second, with technically even more possible.
A 60-minute film in highest quality would take about one hour to load with DSL, VDSL shortens this time to 3:46 minutes, with fiber optics it is only 56 seconds of download time. This is made possible by germanium’s ability to transport information through optical signals.
Almost No Alternative Supplier Countries
According to Peter Buchholz, head of the German Mineral Resources Agency, it is even more difficult to find alternative supply countries for germanium than for gallium. While the latter could still be partially obtained from German aluminum production, there are hardly any other primary supply sources for germanium in the medium to long term. Fortunately, many companies have taken precautions and stocked up on large quantities of germanium. Private storage companies such as Noble BC can also help to supply the industry in an emergency. Our warehouses are currently still well stocked. Investors in tangible assets have the chance of attractive tax-free returns, as the price of germanium is very likely to rise due to its increasing scarcity.