Germany's chip industry faces acute shortages from China's export restrictions

Germany’s chip industry is facing shortages, according to data from the Ifo Institute, which shows a shortage of semiconductors and rare earth materials in key technology ￰0￱ Ifo business climate index report shows a moderate rise in October, as manufacturers ￰1￱ to the Ifo report, 10.4% of companies in Germany’s electronics and optical industries reported raw material shortages in October, an increase from 7% in July and 3.8% in ￰2￱ the entire manufacturing sector, approximately 5.5% of companies reported difficulties in sourcing raw ￰3￱ Ifo report also highlighted a persistent shortage, particularly in high-tech and precision ￰4￱ Ifo business climate index rose to 88.4 in October from 87.7 Klaus Wohlrabe, head of surveys at the Ifo Institute, stated that the chip shortage has resurfaced in German manufacturing ￰5￱ cited trade restrictions on critical raw materials and rare earth elements as crippling supply ￰6￱ highlighted the electronic components and optical devices sectors as the most affected. 📈Die Stimmung unter den Unternehmen in Deutschland hat sich ￰7￱ #ifoGeschäftsklimaindex stieg im Oktober auf 88,4 Punkte, nach 87,7 im ￰8￱ deutsche Wirtschaft hofft weiter auf eine Belebung der Konjunktur im kommenden Jahr. @KlausWohlrabe @FuestClemens ￰9￱ — ifo Institut (@ifo_Institut) October 27, 2025 The Ifo data suggests that bottlenecks, which had eased considerably earlier this year, are again emerging as a threat to production capacity and export ￰10￱ many electronics firms relying on imports from Asia and constrained by geopolitical tensions, manufacturers struggle to secure steady deliveries of semiconductors, chips, and optical sensors —raw materials essential to Germany’s automotive, machinery, and green-tech ￰11￱ Ifo business climate index rose to 88.4 in October, up from 87.7 in ￰12￱ increase was boosted by optimistic expectations for a better upcoming ￰13￱ report noted that companies’ situation worsened for the third month straight, reflecting a moderate but fragile ￰14￱ Brzeski, Global Head of Macro at ING, revealed that after months of stagnation, the German economy is still trying to find its ￰15￱ added that material shortages, weak external demand, and an uncertain policy environment are the key factors limiting Germany’s ￰16￱ to Brzeski, the renewed challenges may easily cut industrial output growth in Q4, risking another year of ￰17￱ wrote that German industries no longer dictate the rules of the ￰18￱ are currently experiencing global supply ￰19￱ noted that China is shifting from an export destination to a system rival.

China’s tight export controls add pressure to the German chip shortage The recent tightening of controls imposed by the Chinese government has exacerbated Germany’s slowing ￰20￱ restrictions have increased the cost and lead time for critical raw materials used in automotive sensors, power electronics, and advanced optical ￰21￱ areas maintain Germany’s global leadership in the manufacturing ￰22￱ faces bureaucratic hurdles, skilled labor shortages, and slow disbursement, which risk further impacting growth even with the €500 billion fiscal stimulus package announced earlier this year for infrastructure and ￰23￱ government has also delayed implementing the structural reforms necessary to boost its competitiveness, despite Chancellor Friedrich Merz’s ￰24￱ leaders have urged the government to reduce bureaucracy and improve ￰25￱ to a recent Cryptopolitan report from earlier this month, the Chinese Ministry of Commerce tightened controls on rare earth exports and processing technologies, thereby preventing unauthorized overseas ￰26￱ country accounts for over 90% of the world’s rare earth and magnet ￰27￱ produces 17 elements that power electric vehicles, aircraft engines, and military ￰28￱ then restricted the export of rare earth materials in response to the ￰29￱ on exporting chipmaking equipment to China.

Initially, in August, shipments of rare earth magnets from China surged 10.2% from July, and production increased by 15.4% ￰30￱ was due to an agreement between China, the U. S., and Europe to expedite shipments and ease ￰31￱ latest controls were prompted following a reported inconsistency in rules agreed upon by the U. S., Japan, and the ￰32￱ Bybit now and claim a $50 bonus in minutes