China tightens indium phosphide exports, delaying AI optical chip deployments
China has tightened exports of indium phosphide (InP), a crucial material for fast optical chips used in AI data centers.
This move is causing delays worldwide, with tech leaders like Coherent's CEO Jim Anderson headed to China last year (May 2025) to try and sort things out.
InP wafer prices jump to $5,000
China controls 70% of global indium production, so these restrictions are shaking up supply chains and making InP wafers way more expensive. Prices have jumped 250% to $5,000.
While US photonics firms are trying to ramp up production and source from non-Chinese suppliers, including Japan's Sumitomo Electric Industries, they can't fill the gap quickly.
Some Chinese manufacturers are mostly keeping their supplies for local use, leaving the rest of the world scrambling and highlighting how Beijing's decisions ripple through tech industries everywhere.