Deloitte's report forecasts that the ongoing trade tensions between China and the US, particularly concerning chips, could lead to shortages of essential metals used in chip manufacturing, such as gallium and germanium. This scarcity is expected to prompt a heightened interest in electronic waste (e-waste) recycling as a means of addressing the raw material deficiencies.
Gallium is crucial for Blu-ray technology, mobile phones, pressure sensors for touch switches, and a variety of military applications like night-vision goggles. On the other hand, germanium is utilized in fiber optics, high-speed chips, and infrared radiation, also with applications in the military arena.
China, the dominant global producer of gallium and germanium, has faced challenges as it relies heavily on the import of advanced chips, unable to produce them domestically to power AI technologies due to export controls and restrictions from the US and other countries. In response to these limitations, Deloitte recommends exploring e-waste recycling, pursuing alternative sources of raw materials outside of China, and implementing stockpiling strategies to mitigate supply chain vulnerabilities.
Gillian Crossan, Lead Client Service Partner & Global Technology Sector Leader at Deloitte, emphasizes the importance of e-waste recycling in addressing the scarcity of minerals, particularly as an alternative to traditional economic perspectives. Furthermore, she anticipates that the year 2024 will have an increased focus on finding alternative supply sources for scarce minerals and the necessity of AI chips for technological advancement, despite potential shortages in the near term. Crossan also envisions an easing of the chip shortage by the end of 2024 as more companies and producers enter the market.
