"BlackDiamonds Are Forever": How To Profit From The China-Driven Germanium Squeeze
Piper Sandler initiated coverage of LightPath Technologies with an "Overweight" rating and a 12-month price target of $15, citing the defense supplier's proprietary BlackDiamond infrared glass, which completely "circumvents" the need for Germanium amid "significant cost increases and scarcity stemming from recent Chinese export controls."
Clarke Jeffries, vice president and senior equity research analyst at Piper Sandler, specializes in industrial software and defense technology. In a note titled "BlackDiamonds Are Forever," Jeffries outlined the core value proposition underpinning LightPath's investment thesis:
The urgent need for the US to seek alternatives to Germanium, whether through BlackDiamond or new supply lines, comes after China curbed exports of the rare earth metal, sending prices soaring to 14-year highs. This has unleashed a germanium squeeze, given that China accounts for about 91% of primary germanium production and controls more than 90% of global refining capacity, according to S&P Global data.
Beijing introduced export-licensing requirements in August 2023 before banning shipments to the U.S. in late 2024. Although China suspended that blanket ban through November 2026, exporters still require government licenses, while restrictions on sales to U.S. military users and for military applications remain in place.
With BlackDiamond, LightPath can produce optics and infrared camera systems critical for large defense programs without supply disruptions or margin compression caused by soaring germanium prices.
LightPath shifts supply chains to the West.
Key products
What is BlackDiamond?
Customers
BlackDiamond and beyond
The key point here is that BlackDiamond infrared glass, which circumvents reliance on Chinese-controlled Germanium, fits within the broader strategic push to reshore manufacturing and secure critical domestic supply chains against future disruptions.
One private equity firm we spoke with said its investment strategy centers on identifying US companies capable of scaling domestic production if China moves against Taiwan and severs key supply chains. The Covid pandemic served as a warning and early stress test, exposing how quickly complex overseas supply chains can break down in just a matter of weeks. A Taiwan conflict would represent the same vulnerability on a far larger and more consequential scale because of the island's importance to global chip production.
Professional subscribers can read more on rare earths and defense here at our new Marketdesk.ai portal.
Tyler Durden Thu, 08/13/2026 - 06:55
Continue reading...
[ H/T ZeroHedge ]
Piper Sandler initiated coverage of LightPath Technologies with an "Overweight" rating and a 12-month price target of $15, citing the defense supplier's proprietary BlackDiamond infrared glass, which completely "circumvents" the need for Germanium amid "significant cost increases and scarcity stemming from recent Chinese export controls."
Clarke Jeffries, vice president and senior equity research analyst at Piper Sandler, specializes in industrial software and defense technology. In a note titled "BlackDiamonds Are Forever," Jeffries outlined the core value proposition underpinning LightPath's investment thesis:
The urgent need for the US to seek alternatives to Germanium, whether through BlackDiamond or new supply lines, comes after China curbed exports of the rare earth metal, sending prices soaring to 14-year highs. This has unleashed a germanium squeeze, given that China accounts for about 91% of primary germanium production and controls more than 90% of global refining capacity, according to S&P Global data.
Beijing introduced export-licensing requirements in August 2023 before banning shipments to the U.S. in late 2024. Although China suspended that blanket ban through November 2026, exporters still require government licenses, while restrictions on sales to U.S. military users and for military applications remain in place.
With BlackDiamond, LightPath can produce optics and infrared camera systems critical for large defense programs without supply disruptions or margin compression caused by soaring germanium prices.
LightPath shifts supply chains to the West.
Key products
What is BlackDiamond?
Customers
BlackDiamond and beyond
The key point here is that BlackDiamond infrared glass, which circumvents reliance on Chinese-controlled Germanium, fits within the broader strategic push to reshore manufacturing and secure critical domestic supply chains against future disruptions.
One private equity firm we spoke with said its investment strategy centers on identifying US companies capable of scaling domestic production if China moves against Taiwan and severs key supply chains. The Covid pandemic served as a warning and early stress test, exposing how quickly complex overseas supply chains can break down in just a matter of weeks. A Taiwan conflict would represent the same vulnerability on a far larger and more consequential scale because of the island's importance to global chip production.
Professional subscribers can read more on rare earths and defense here at our new Marketdesk.ai portal.
Tyler Durden Thu, 08/13/2026 - 06:55
Continue reading...
[ H/T ZeroHedge ]
