Why China is tightening its grip on indium exports
What's the story
China is tightening its grip on indium exports, a metal critical for next-gen data centers. The move has raised concerns among buyers, who fear that this niche metal could soon be added to Beijing's export control regime. China accounts for nearly 70% of the world's indium supply, a byproduct of zinc refining mainly used in displays and solder.
Tech significance
Indium phosphide added to export control list
Indium is also the raw material for indium phosphide, which is used to manufacture high-speed optical chips for AI data centers. In February 2025, Beijing added indium phosphide to its export control list. The restrictions have posed a major challenge for next-gen data centers. This issue was even raised by the CEO of NVIDIA-backed chipmaker Coherent during his visit to Beijing with US President Donald Trump in May.
Export concerns
Increased scrutiny over purchases
Despite not being on the export control list, indium metal is facing increased scrutiny over purchases from Chinese customs. A European buyer was asked for end-user information for the first time this year. Meanwhile, a major North American buyer said that approvals have gone from same-day to several days due to increased paperwork scrutiny. This buyer described the situation as "tense."
Future prospects
Fears of tighter controls
The increased due diligence isn't uniform, with some buyers hearing of extra scrutiny but not facing it themselves. So far, no shipments have been blocked. However, there are fears that this could be a precursor to tighter controls or end-user disclosures. Indium has been flagged as a potential vulnerability for the US, which is looking to stockpile up to 403 tons of the material over three years.