Raw Material Blackmail: China Restricts Indium Exports, Threatening AI Factory Optical Networks

The technological war is moving to the molecular level. On June 19, 2026, the PRC Ministry of Commerce tightened inspections and export controls on indium—a rare earth metal whose demand has skyrocketed amid the AI boom.

This move is Beijing’s asymmetrical and highly painful response to American technological embargoes. Indium (specifically indium phosphide) is a critical component for manufacturing high-speed optical transceivers. Without them, instantaneous data exchange between tens of thousands of GPUs in modern data centers is impossible (the bottleneck NVIDIA's CEO discussed at Computex). By controlling the lion's share of global indium mining and processing, China gains powerful leverage over Western Big Tech. While the US bans the export of silicon, the PRC cuts off access to the materials without which this silicon cannot be linked into a single computing cluster.

Source: Ministry of Commerce / Reuters