Germanium Countdown: Only 22 days left until export controls!

Only 22 days remain until August 1st when the export of the semiconductor metal Germanium will also become subject to approval in China. With a global annual production of 225 tons (2022), Germanium is even scarcer than Gallium, which stands at 550 tons. Additionally, this technology metal serves as a bottleneck for two crucial technological developments: the semiconductor industry and fiber optic expansion.

New Chip Law

This week, the EU confirmed its new chip law. As part of this, the union is allocating 43 billion euros to increase the EU’s share of global semiconductor production capacity from the current under ten percent to over 20 percent. A substantial portion of 3.3 billion euros will be dedicated solely to the research of semiconductor technologies. Germanium plays a central role in their development as a semiconductor metal. Furthermore, it replaces the previously used silicon in the latest generation of transistors.

“Defense Metal”

As a component of semiconductor chips, Germanium is also a significant element in the defense industries of European countries. Due to its optical properties, it is used in this sector as a material for military night vision devices, infrared cameras, and scopes. If China restricts the export of this semi-metal, it would directly impact the defense capabilities of free nations.

€50 Billion for Fiber Optics

Another political initiative where Germanium is indispensable is the Gigabit Strategy announced by Digital and Transport Minister Volker Wissing in March 2022. This strategy aims to replace the existing copper lines and telephone cables with fiber optic connections in at least 50% of German households by 2025. This would triple the existing fiber optic connections. According to Wissing, the telecommunications industry will invest €50 billion in the project. The goal is to have all homes connected by 2030. The government’s primary aim is to improve the sometimes dire situation in Germany’s rural areas.

Fast Downloads through Optical Signals

Compared to DSL, fiber optics provide significantly more performance. Formerly used DSL offered 16 megabits per second, while today’s common VDSL offers 500 megabits. A current fiber optic connection reaches about 1000 megabits per second, with even more technically feasible. A 60-minute film in the highest quality would take about an hour to download with DSL, reduced to 3 minutes and 46 seconds with VDSL, and a mere 56 seconds with fiber optics. This is made possible by Germanium’s ability to transport information through optical signals.

Very Few Alternative Supply Countries

According to Peter Buchholz, head of the German Raw Materials Agency, finding alternative supply countries for Germanium is even more challenging than for Gallium. While the latter can still be obtained from German aluminum production, there are scarcely any other primary sources for Germanium in the medium to long term. Many companies have fortunately prepared and secured larger quantities of Germanium. Even private storage companies like Noble BC can assist in supplying the industry in case of emergencies. Currently, our storage is still well-stocked. Tangible asset investors have the opportunity for attractive tax-free returns, as the price of Germanium is likely to rise due to its increasing scarcity.