- China is tightening oversight of indium exports, a metal critical to the new generation of AI data centers. The country currently produces nearly 70% of the global indium supply.
- Indium is primarily used in displays, soldering materials, and especially the production of indium phosphide.
- Indium phosphide is the substrate material for manufacturing high-speed optical chips used in AI data centers.
- In February 2025, Beijing added indium phosphide to its export control list.
- These restrictions have significantly affected the AI industry’s supply chain.
- The CEO of Coherent, a chipmaker backed by Nvidia, joined US President Donald Trump’s delegation to Beijing in May to raise the issue.
- Although indium metal is not yet on the export control list, businesses report that inspections have become stricter.
- A European importer was required for the first time to provide information regarding the end-user and place of use.
- A major North American customer stated that export approval times have extended from within the same day to multiple days.
- Some businesses worry that the current reporting requirements are preparatory steps for stronger restrictive measures.
- So far, no shipments have been reported as completely blocked.
- However, the industry is closely monitoring the risk of end-user control mechanisms being applied, similar to other strategic commodities.
- The US considers indium a material with supply risks and is ramping up its strategic stockpile.
- The US Defense Logistics Agency has issued a proposal to stockpile up to 403 tons of indium over a three-year period.
- Some North American customers view the new requirements as a harbinger of potential export restrictions or bans in the future.
- 📌 Conclusion: Indium is emerging as a strategic bottleneck in the global AI supply chain. China controls nearly 70% of the world’s production and placed indium phosphide under export controls starting in 2025. Although indium metal is not officially restricted, increasingly rigorous inspection procedures have left businesses worried about the possibility of tighter measures. Amid the rapidly growing demand for optical chips in AI data centers, the US has begun plans to stockpile up to 403 tons of indium to mitigate the risks of supply dependence on China.
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