TAIPEI (Taiwan News) — China is restricting or delaying exports to Taiwan of key materials used in optical, semiconductor, and aerospace applications, creating supply-chain bottlenecks for Taiwanese companies, Nikkei Asia reported Thursday.
Several optical technology manufacturers have faced lengthy customs checks and delays in obtaining germanium- and quartz-based materials from Chinese suppliers since last year, people familiar with the matter told Nikkei Asia.
“It’s an industrywide issue,” one optical industry executive said. “Many of my peers have encountered the same problem, and it could significantly extend lead times across our business.” The source requested anonymity because of concerns about retaliation from Beijing.
Germanium is used in infrared lenses for thermal imaging and other defense and industrial applications, as well as fiber optics and photonics. Quartz is essential for optical components and semiconductor manufacturing. China is a major global supplier of both materials.
One person familiar with the matter said some Chinese suppliers had been summoned by authorities and questioned about their customers and shipments. “We have already lost some orders because longer lead times for certain materials mean we can’t meet our customers’ delivery schedules,” the person said.
The reported delays have also affected chip equipment makers, with one executive saying his company’s product lead time had been extended by months because tighter supplies of quartz had affected production. “The quality and precision for quartz is very strict for the chip industry, and currently we don’t have an alternative source from China,” the executive said.
Aerospace companies have faced similar problems with some permanent magnets from China, sources said. Neodymium permanent magnets are used in motors, including those for advanced robotics, while an aerospace supplier said finding cost-effective alternatives elsewhere has been difficult, per Nikkei Asia.
China has increasingly used export controls on strategic and dual-use materials amid trade and geopolitical disputes, Nikkei Asia reported. Beijing has required licenses for exports of gallium and germanium since 2023, while in December 2024 it tightened controls on certain dual-use items destined for the US, including by generally denying licenses for gallium, germanium, antimony, and superhard-material dual-use items.
Taiwan is also working to reduce its reliance on foreign sources of critical materials, with the Ministry of Economic Affairs supporting the Industrial Technology Research Institute in developing domestic rare-earth technologies. The government aims to establish a pilot production line within three years, part of broader efforts to strengthen Taiwan’s supply of materials needed for advanced manufacturing.
