Surprising Supply Chain Allies

I was listening to a news article on NPR about the economic connections between Germany and China, particularly in the automotive market—it makes obvious sense. But what caught me completely off guard was discovering a different, lesser-known connection between these two countries: the raw material trade for semiconductors.

What really surprised me is that high-purity silicon, which is essential for wafer production, comes from sand—specifically, quartz deposits. And yet, when you think of sandy beaches, Germany isn't the first country that comes to mind! Despite this, Germany is the world’s top net exporter of high-purity silicon, responsible for a third of the global supply, with over 70% of its exports going to China.

Even more astonishing is that, despite China being a leading producer of silicon, it still imports significant amounts to meet its demand. The trade dynamics don’t stop there—China dominates the export of germanium and silicon carbide, yet faces pressures in securing its supply chain.

This surprising revelation underscores the importance of understanding these complex trade relationships, especially as we navigate challenges like supply chain disruptions and critical material shortages.