China tightens inspection of indium exports, buyers worry it could become a weapon in trade war

Indium may become a powerful trade war weapon for China. (Reuters)

[Compiled by Wei Guojin/Taipei Report] Reuters reported on the 19th that China is increasing its export review of indium, causing some buyers to worry that this special metal used in next-generation data centers will be included in export controls, becoming one of Beijing’s most powerful trade weapons.

China produces nearly 70% of the world's indium. The metal is a by-product of the zinc refining process. It is mainly used in the manufacture of displays, but it is also a raw material for the production of indium phosphide, which is used to manufacture high-speed optical communication chips required for artificial intelligence (AI) data centers.

Beijing added indium phosphide to its export control list in February 2025, and this restriction has become an obstacle to the development of next-generation data centers. This led the CEO of Coherent, a chip manufacturer invested by Huida, to raise this issue when he visited Beijing with US President Trump last month.

The report pointed out that although indium metal is not currently on the export control list, two buyers revealed that their purchases are facing increasing scrutiny from Chinese customs. For the first time this year, a European buyer was asked to disclose end-user data, including their location.

Another major North American buyer also said that the approval time has been extended from the day of application to several days, possibly due to the stricter review of documents. They described the situation as "nervous."

Some industry players are worried that this may be a precursor to tightening controls or forcing end-user information disclosure. China is using relevant information to clarify global supply chains and choke points.

Indium has been identified as a potential vulnerability for the United States. Earlier this year, the U.S. Defense Logistics Agency announced a tender to reserve up to 403 tons of indium within three years. Another North American buyer suspected that the Chinese authorities' request for additional information was "a precursor to restrictions or an outright ban on exports."

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