China Tightens Indium Export Checks as AI Demand for Chips Rises

China has stepped up scrutiny over exports of indium, a critical raw material for high-speed optical chips used in AI data centres, raising concerns among global buyers that the niche metal could become Beijing's next export control lever. Several buyers have reported new end-user disclosure requirements and slower approval times, signalling a tightening regime for a material where China controls nearly 70 per cent of global supply.

Indium, a byproduct of zinc refining, has traditionally been used in flat-panel displays and solder, but its strategic importance has surged with the rise of AI. It is the key ingredient in indium phosphide, a compound semiconductor essential for making the high-speed optical chips that connect servers in AI data centres. China already placed indium phosphide on its export control list in February 2025, and the new checks on raw indium represent a notable escalation. The CEO of Nvidia-backed chipmaker Coherent even travelled to Beijing with US President Trump in May to raise the issue directly.

The tighter regime has direct consequences for the global semiconductor supply chain. A European buyer was asked for the first time to disclose detailed end-user information, while a North American buyer reported approval times stretching from same-day to several days. The US Defense Logistics Agency has responded by issuing a request for proposals to stockpile up to 403 tonnes of indium over three years, underscoring how seriously Washington views the supply chain risk.

Why it matters for Singapore: Singapore is a linchpin of the global semiconductor industry, hosting fabrication plants from companies like GlobalFoundries, Micron, and UMC, as well as a dense ecosystem of chip design and equipment firms. Any disruption to critical mineral supply chains — particularly one dominated by a single supplier — directly threatens the stability of semiconductor manufacturing that underpins Singapore's electronics sector and broader AI infrastructure ambitions. The tightening of indium exports should sharpen the city-state's focus on diversifying its critical mineral sourcing and deepening supply chain resilience, a conversation that is only growing more urgent as AI deployment accelerates across the region.