Gallium is a silvery-white, soft metal that melts at just 29 °C and is indispensable in numerous high-tech applications. Its occurrence in bauxite and zinc ores makes it a classic by-product, whose isolated extraction remains challenging. Limited production and growing demand give the metal strategic importance.
Source: Stockdio*
After gallium prices initially rose sharply during the COVID-19 pandemic, a correction followed in 2022, before Beijing’s export controls in summer 2023 suddenly lifted prices to a new plateau. Since then, the price has moved within a narrower range, but every political comment from Beijing or Washington triggers noticeable volatility. In parallel, pressure on supply is growing: more efficient gallium nitride-based power electronics are conquering data centers and e-mobility, while compound semiconductors for 5G networks and radar systems tie up additional quantities. Recycling rates are rising, but so far can only partially compensate for primary demand. Overall, the market remains small but highly sensitive – and thus an early indicator of geopolitically induced supply chain risks.
Although gallium is processed only in small quantities, it is one of the key metals in modern electronics. Its ability to form semiconductor compounds such as gallium arsenide or gallium nitride enables chips with high switching frequencies, low energy consumption, and good thermal conductivity. In addition, the metal is used in optoelectronic components, special alloys, and medical diagnostics.
Gallium nitride (GaN)-based power transistors are increasingly replacing silicon in power supplies, fast chargers, server farms, and inverters for photovoltaic and wind power systems. GaN technology enables significantly higher switching frequencies, lower conduction losses, and more compact designs. This reduces cooling requirements, the weight of electrical systems, and operating costs, which significantly improves energy efficiency over the entire life cycle.
Gallium arsenide (GaAs) and gallium indium phosphide (GaInP) form the basis of many red, infrared, and high-power LEDs. Particularly efficient light-emitting diodes for display, plant, and general lighting, as well as for optical data communication, use these semiconductor compounds. They are characterized by high luminous efficacy, long lifespan, and precise wavelength control – crucial factors for energy- and resource-saving lighting solutions worldwide. Today.
Multi-junction solar cells made of gallium arsenide and related III-V semiconductors achieve record efficiencies of over 40 percent under concentrated light. They are used in satellites, space probes, and increasingly in terrestrial high-performance PV systems, where their efficiency drastically reduces the required area. Thanks to their radiation resistance and temperature stability, they withstand harsh space conditions as well as desert locations on Earth. Reliably.
Gallium arsenide-based laser diodes emit coherent light for fiber optic networks, LIDAR systems in autonomous vehicles, quantum optics, and medical imaging. Combined with gallium nitride compounds, extremely robust sensors for high-frequency and terahertz applications are created. The components are tiny, efficient, radiation-resistant, and operate reliably even at high temperatures, which significantly drives industrial automation and new Industry 4.0 concepts. Particularly in high demand worldwide.
Gallium forms metallic alloys with very low melting points, which serve as non-toxic substitutes for mercury in thermometers, heat exchangers, and cooling circuits. Liquid metal thermal conductors based on gallium increase heat dissipation in high-performance processors and power electronics. In addition, material scientists are researching gallium-containing phase-change materials for seasonal heat storage in buildings and in battery packs for electric vehicles. This could significantly reduce heating and cooling loads.
Although gallium is processed only in small quantities, it is one of the key metals in modern electronics. Its ability to form semiconductor compounds such as gallium arsenide or gallium nitride enables chips with high switching frequencies, low energy consumption, and good thermal conductivity. In addition, the metal is used in optoelectronic components, special alloys, and medical diagnostics.
China dominates global gallium production, accounting for well over 90 percent of primary refining. There, gallium hydroxide is extracted on a large scale from bauxite residues and then refined into high-purity metal. Smaller producers in Japan, South Korea, and Russia primarily serve their own markets and long-term industrial partnerships. As it is a by-product, production volumes react slowly to price impulses; significant capacity expansions require investments in new processing plants along existing aluminum or zinc smelters. Export controls, environmental regulations, and energy costs also play a growing role. With a view to sustainability, some Western companies are shifting the production of smaller quantities to recycling facilities to reduce dependencies and increase supply security.
The majority of globally available gallium flows into semiconductor manufacturing, with compound technology manufacturers in Japan, the United States, and South Korea being the main consumers. In Europe, Germany and the Netherlands are leading markets, driven by the production of power electronics, photonics, and research. In the future, demand will grow due to the expansion of 5G networks, data centers, electric vehicles, and highly efficient photovoltaic systems. The use of gallium-containing LEDs in plant cultivation, UV disinfection, and special lighting creates additional impulses. Because many producers want to secure their supply long-term, they conclude off-take agreements or build recycling circuits to cushion price peaks and geopolitical risks. The market for gallium nitride components is developing particularly dynamically, with volumes growing by double digits annually.
Direct investment in physical gallium is hardly accessible to private investors, as trading primarily takes place through long-standing industrial agreements. Instead, investors can turn to shares of mining and technology companies that produce gallium or use it in their products. Broadly diversified commodity ETFs also sometimes contain exposed companies. For strategic investors, it is also worth looking at recycling and refining specialists whose margins can benefit from rising prices.
Since gallium is a niche metal with low spot turnover, relevant companies often have low market capitalization and limited liquidity. At the same time, the potential for price jumps is high when supply bottlenecks emerge. Investors should therefore pay attention to sufficient diversification, political risks in producing countries, and technological substitution by alternative materials. Certificates on gallium prices do not yet exist, so engagements are always indirect and a thorough analysis of the underlying business models remains indispensable.
Gallium is produced as a by-product of aluminum and zinc smelting. Gallium hydroxide is leached from bauxite red mud using sodium alkaline leaching and then electrolytically reduced to metal. In zinc smelters, it is obtained during solvent extraction. Both processes require high purity standards, as impurities would later reduce semiconductor quality. Modern recycling also recovers gallium from discarded LEDs, photovoltaic cells, and semiconductor waste.
Gallium enables compound semiconductors like GaN and GaAs, which deliver faster and more energy-efficient chips than pure silicon. These are indispensable for 5G networks, radar, satellites, e-mobility, and high-performance LEDs. Since production and refining are heavily concentrated in China, gallium is considered a critical raw material with a high supply risk. Political tensions can therefore disrupt global supply chains.
In some applications, GaN or GaAs components can be replaced by silicon carbide (SiC), which also tolerates high voltages and temperatures. For LEDs and lasers, aluminum-gallium-indium-phosphide alloys are available as variants, but they do not completely reduce the gallium content. Completely gallium-free solutions with comparable performance are still in the research stage. Therefore, gallium remains difficult to replace in the medium term.
China’s export permits for gallium have significantly tightened spot trading since 2023. Prices are rising, and Western buyers must build larger safety stocks or develop alternative sources of supply. The uncertainty has also spurred investments in recycling and refining capacities outside China to make supply chains more resilient. In the short term, this increases costs, but could lead to greater diversification in the long term.
Gallium is solid at room temperature but melts at about 29 °C. Containers must therefore be cooled or insulated in summer to prevent leaks. The metal reacts little with air or water, is non-toxic, and is not subject to hazardous goods regulations, but remains valuable and requires careful inventory management. A dry storage environment also prevents corrosion of accompanying metals.
Source: Stockdio*
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