19 September 2026
Executive Summary
Western manufacturers remain heavily dependent upon China for two specialist metals critical to semiconductors, telecommunications, defence and clean technology, despite three years of efforts to diversify supply.
China introduced export controls on gallium and germanium in 2023, later extending controls across other strategically important minerals.
Since then, Western governments and businesses have attempted to develop alternative supplies.
Progress remains limited.
China accounted for approximately:
- 98.9% of primary gallium production in 2025.
- 68.6% of germanium production in 2025.
Prices for the two metals are now approximately nine to ten times their 2023 levels.
Demand is simultaneously increasing because of growth in:
- Artificial intelligence.
- Fibre-optic networks.
- Infrared imaging.
- Semiconductors.
- Defence technology.
Several Western production projects are being developed, but many remain years from full commercial operation.
The critical supply-chain problem is therefore not simply price. It is the continuing absence of sufficient alternative production capacity.
UK Impact
UK companies may have hidden exposure through products including:
- Semiconductors.
- Fibre-optic equipment.
- Telecommunications.
- Thermal imaging.
- Aerospace systems.
- Defence equipment.
- Solar technology.
- Specialist electronics.
Businesses may not purchase gallium or germanium directly.
The dependency can sit several tiers below the immediate supplier.
This makes the exposure particularly difficult to identify through conventional supplier due diligence.
Global Impact
The imbalance remains considerable.
S&P Global estimates non-Chinese gallium supply capacity could total only around 20 tonnes by the end of 2026, leaving a supply gap of approximately 678 tonnes outside China.
Non-Chinese germanium production is similarly expected to remain substantially below demand.
Projects are being developed in countries including:
- Australia.
- Canada.
- Greece.
- India.
- South Korea.
- United States.
But production capacity takes time to develop.
Even by 2030, estimates suggest non-Chinese consumers may still depend upon China for approximately 65% of their gallium requirements.
Substitution is possible in some applications but can require costly product redesign and technical qualification.
Our View
Businesses should map critical-mineral dependency beyond their first-tier suppliers.
Companies should ask:
- Do our products contain gallium or germanium?
- Do supplier components depend upon them?
- Where are those materials sourced?
- Is supply ultimately Chinese?
- Are export licences required?
- How much inventory exists?
- Are suppliers stockpiling?
- Are alternative sources contracted?
- Are alternative materials technically possible?
- Would substitution require redesign?
- Would products need recertification?
- How long would qualification take?
- Could recycling provide additional supply?
- Are long-term purchase agreements available?
- Could a geopolitical dispute restrict availability further?
- Could suppliers continue production at substantially higher metal prices?
There is an important distinction between announced alternative capacity and operating alternative capacity.
A project expected to produce metal in 2028 cannot solve a supply interruption occurring in 2026.
Risk Indicator: HIGH – CHINA, CRITICAL MINERALS & TECHNOLOGY SUPPLY CHAINS
Does This Risk Affect Your Business?
Invictus Risk Solutions helps businesses find practical solutions to insurance, risk and commercial challenges.
From individual businesses to major international organisations, risk is our business.
TALK TO INVICTUS →Disclaimer
The information contained within these Market Alerts is provided for general market awareness and informational purposes only. It does not constitute financial, legal, investment, regulatory or insurance advice. Whilst every effort has been made to ensure accuracy at the time of publication using multiple reputable and independently verified sources, geopolitical events, legislation, regulation and market conditions may change rapidly. Readers should obtain appropriate professional advice before acting upon any information contained herein.
Invictus Risk Solutions LLP – Helping organisations stay ahead of emerging risks through informed insight and independent analysis.