China Tightens Scrutiny of Indium Exports for AI Chips

Chinese authorities are increasing scrutiny of indium exports, raising concerns in the global technology sector that the metal could become the next target in a series of export controls on critical materials. Indium is a key raw material for producing indium phosphide, a compound essential for manufacturing the high-speed optical chips used in artificial intelligence data centers.

China accounts for approximately 70 percent of global indium production. While the metal itself is not currently subject to export controls, several international buyers have reported heightened customs checks in recent months. According to these buyers, Chinese customs officials have in some cases demanded more detailed information about end users and their locations, and approval times for shipments have lengthened from same-day to several days. The increased oversight is not uniform, however, with other buyers reporting no direct changes to their purchasing processes.

The developments follow China's imposition of export controls on indium phosphide in February 2025. Since those controls took effect, industry participants have reported delays in obtaining the necessary licenses to export the...