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Semiconductor chip materials: What and where to source them
Semiconductor chips are predominantly made from silicon, germanium and gallium arsenide. Production is limited and mostly based in China, which could create future supply issues.
Semiconductor chips, more colloquially known simply as semiconductors, are critical components of many electronic devices, such as computers, solar cells and LED displayers. To successfully manufacture these chips, they must be made in highly specialized factories from a few specific materials with semiconductive properties.
Once electric circuitry has been added to base semiconductor material, the resulting chips can function as integrated circuits, transistors and diodes. Semiconductors are effectively deployed as a switch for electrical current. Since they need to be able to conduct electricity but only under specific conditions, semiconductors must be produced out of materials that possess the characteristics of conductors and insulators. Only a few materials meet this need, although research is being done to identify new possible substances that will support the function of semiconductors.
As demand grows for electronic devices with greater computational power, so too does the demand for semiconductors. The expanding development of AI tools is one driver of this demand, as is the investment in green energy products like solar cells; in 2024, global semiconductor materials market revenue increased 3.8% to $67.5 billion. The high demand for semiconductors, combined with the specific characteristic requirements, means that their materials are a valuable commodity.
Primary materials and their mines
As a group, semiconductor materials must have atoms with a low number of free electrons (commonly four), which are needed for conductivity. The movement of these free electrons enables electricity to flow between atoms and create a current, but such movement is restricted in semiconductors. This is because their atoms bond to each other and form a crystal lattice, whose ordered atomic structure controls electric conduction. Under specific circumstances, electricity can be conducted through the lattice. This makes it possible to set up a system where electrical flow can be switched on and off as needed.
Currently, there are three main materials that fulfil this criterion and so are used in the production of semiconductors:
Silicon (Si)
Sources: Quartzite, silica sand deposits
The most popular choice for semiconductor chips, silicon has been used for this purpose since the 1950s. As the second most abundant element on Earth (after carbon), silicon is plentiful in supply, especially in the form of quartzite. This material is easy and affordable to extract, purify and crystallize, and has a higher melting point than germanium, making it an efficient and effective choice. It is also possible to 'dope' silicon by injecting it with impurities, which gives the material new electrical properties. Silicon semiconductors are produced at semiconductor fabs, or fabrications, in the form of silicon wafers, which are very thin and compact in size.
Major producers: China, Russia, Brazil, United States, Norway
According to the U.S. Geological Survey, China produced almost 80% of the global supply of silicon in 2024. The next countries in order of total silicon production were Russia, Brazil, the U.S. and Norway. Silicon production includes both ferrosilicon (predominantly used for cast iron and steel) and silicon metal (used for alloying with aluminum and for chemical production). Most countries produce higher volumes of ferrosilicon than silicon metal, except for China, which produces 53% silicon metal.
Germanium (Ge)
Sources: Byproduct of zine ore processing, coal ash
The first semiconductors were made from germanium and used in the development of the first transistor. It has high electron mobility, which results in faster electric currents, and the capacity to store a greater supply of excess energy for use in the event of a circuit outage. Although it is no longer the most popular choice, germanium is still commonly used in computer chips and the production of fiber optic cables, solar cells and satellite imagery sensors. Germanium is rarely found in a pure ore form and is therefore predominantly extracted by processing zinc ore and coal ash. While it is plentiful and inexpensive, it is a less stable element than silicon and has a lower melting point.
Major producers: China, Canada, Finland, Russia, United States
China produces around 60% of the world's supply of germanium, according to the Critical Raw Materials Alliance (CRMA). In 2023, however, the country announced restrictions on the export of some germanium products, among others, in the name of national security interests. The next leading countries in terms of production are Canada, Finland, Russia and the United States. Canada produces most of its germanium through zinc ore processing, while Russia uses coal.
Gallium Arsenide (GaAs)
Sources of Gallium: Byproduct of bauxite and zinc processing
Sources of Arsenic: Byproduct of copper mining
Not a pure element but a compound of gallium and arsenic, gallium arsenide is now the second most popular material used in semiconductors. The combination of gallium's three free electrons and arsenic's five free electrons results in a semiconductor with eight free electrons – twice that of germanium. This means a quicker response to electrical signals, making gallium arsenide a strong choice for amplifying television satellite frequencies. Semiconductors made of this material are also more heat-resistant and quieter, making them well-suited for use in LEDs, radio communications, and sensors for avionic, space and defense systems.
Major producers of Gallium Arsenide: China, Japan
While gallium and arsenic are both independently produced in greater quantities, gallium arsenide is much harder to find at the level of purity required for semiconductor production. There are only a few individual companies in the world that manufacture the material, and these are almost entirely based in China and Japan, according to the CRMA. There is a single company in Europe that also produces gallium arsenide at the required purity level, as well as one company in Canada (Neo Performance Materials) that produces the required grade of pure gallium.
Supply Considerations
There is research being done to identify new potential semiconductor materials, such as gallium nitride, graphene and pyrite. Investments are also being made in new semiconductor factories and production lines to diversify the current supply network.
Nevertheless, today's manufacturers of semiconductor chips are mostly constrained from working with the three materials listed above. This places a lot of pressure on there being a ready supply available. There are a few aspects to the supply chain that manufacturers may want to keep in mind:
- Geographic concentration of materials. All three materials are predominantly produced in China, with gallium arsenide especially limited in alternatives. Should China set new restrictions on these materials, as it did in 2023, this could inhibit the potential supply available.
- Equally, if U.S. tariffs are imposed on imports from China, as were introduced earlier this year, this would increase the cost of nearly all available supply.
- Supply chain vulnerabilities. Any disruption to international trade could significantly impact the accessibility of high-quality materials since there are so few producers to choose from.
- Environmental impact of extraction. The materials must be mined or extracted and then purified to reach the appropriate quality for semiconductors. Most of these processes are energy-intensive and produce greenhouse gases as a byproduct, which negatively impact the environment.
- National security restrictions on imports. Due to the many sensitive use cases of semiconductors, there may be national security concerns over the importing of these materials from foreign parties. Currently, the U.S. Commerce Department has initiated a Section 232 investigation into such imports.
Madeleine Streets is a senior content manager for WhatIs. She has also been published in 'TIME,' 'WWD,' 'Self' and Observer.'
