Gallium and germanium hit record prices outside China
Three years into China's controls, the West still can't replace Chinese gallium and germanium — and buyers are paying close to ten times more for it.
What happened
Reuters reported that prices for gallium and germanium outside China are now roughly nine to ten times their 2023 levels. Industry estimates put China's 2025 share of primary gallium at nearly 99% and germanium at close to 70%.
S&P Global's preliminary figures show ex-China gallium capacity reaching only about 20 tonnes by the end of 2026 against a supply gap of nearly 680 tonnes. Even if every announced project is built by 2030, a large share of non-Chinese demand would still depend on China.
Our take
These are tiny markets by volume — around 1,000 tonnes of gallium a year — which is exactly why they are so easy to weaponize and so hard to rebuild. The metals are by-products of aluminum and zinc refining, so new supply depends on retrofitting refineries rather than opening a new mine.
The industry's response is the usual playbook: stockpiling, recycling, redesigning products and paying up. None of it works quickly. A realistic goal over five years is less dependence, not independence.
Why it matters for AI infrastructure
Gallium nitride is increasingly used in efficient server power supplies, and gallium arsenide and related compounds power the lasers in optical links between GPUs. Germanium goes into fiber-optic cable and high-speed chips. Rapid growth in AI networking is adding demand just as supply is tightest.
What we're watching
- New ex-China capacity from projects in Greece, Australia, Canada, India, Korea and the US
- The November 2026 expiry of China's US export-ban suspension
- Whether governments introduce price floors to anchor Western supply