China tightens Indium exports checks amid rising AI demand

China is set to tighten the scrutiny over exports of indium, an important niche metal highly valuable for next generation data centers and a raw material for making indium phosphide.

Being the 70 percent producer of the world’s indium, the tightened export scrutiny over the metal may be added to Beijing’s export control regime as feared by the prominent buyers.

The announcement comes as the world is witnessing a boom in AI in the form of expansion of data centers and next-gen AI chips. Indium is also the raw material for making indium phosphide, refined to make high-speed optical chips for AI data centers.

In February 2025, Beijing put indium phosphide on an export control list that restricted the growth of next-gen data centers. In May, during President Trump's visit to China, Nvidia CEO Jensen Huang accompanied the delegation and raised the issue with the government.

A month later, Beijing ramped up scrutiny related to Indium exports as reported by Reuters, according to a source privy to the matter. For the first time this year, a European purchaser reported being required to provide detailed information regarding end-users, including specific geographic locations.

Even the North American buyers are facing restrictions and hurdles related to custom approval times and a heightened focus in paperwork processing.

Some buyers have also raised concerns that such administrative hurdles will lead to tighter controls over the metal, sparking the supply chain constraint fears.

Another North American buyer said “they suspected that the reporting requirements ​were a precursor to restrictions or outright bans on exports.”

For the US, Indium acts as a source of vulnerability as the Defense Logistics Agency requested proposals to “stockpile up to 403 tons of the materials over three years.”