RTX's Gallium Gambit: Securing Defense Tech's Semiconductor Future in the UAE

The global defense and tech sectors are racing to secure access to critical minerals—metals and compounds essential for advanced semiconductors, radar systems, and high-frequency electronics. Among these, gallium, a silvery metal used in gallium nitride (GaN) and gallium arsenide (GaAs) semiconductors, has emerged as a linchpin. Today, Raytheon Technologies (RTX) is making a bold move to lock in supply: partnering with the UAE’s Emirates Global Aluminium (EGA) to establish a gallium production hub. This partnership, anchored by a feasibility study for a high-purity gallium plant, is a masterstroke in supply chain resilience—and a signal for investors to position in critical mineral plays.

Why Gallium Matters for Defense Tech

Gallium’s properties make it indispensable for modern defense systems. GaN-based semiconductors power the AESA radars found on fighter jets like the F-35, enabling high-frequency, high-power transmissions. GaAs, meanwhile, is critical for satellites and communication systems. Yet, over 90% of global gallium production comes from China, where bauxite refining byproducts are mined. This dependency has become a geopolitical risk: supply disruptions could cripple RTX’s ability to deliver radar systems, missiles, and advanced electronics.

The RTX-EGA deal flips this script. By leveraging EGA’s Al Taweelah alumina refinery—a facility that already processes bauxite—RTX gains a secure, non-Chinese source of gallium. The feasibility study, expected to conclude within 12–18 months, will determine whether EGA can scale gallium extraction to meet RTX’s needs while maintaining purity levels exceeding 99.999%. Success here could make the UAE the world’s second-largest gallium producer, a title that translates directly into supply chain dominance.

A Strategic Masterclass in Supply Chain Resilience

This partnership isn’t just about securing gallium; it’s about redefining industrial strategy. For RTX, the MOU addresses two existential threats: supply chain fragility and reliance on state-aligned producers like China. By anchoring production in the UAE—a geopolitically stable partner with Operation 300bn’s industrial growth agenda—RTX mitigates both risks.

For EGA, the deal opens a lucrative new revenue stream. Today, gallium is treated as an impurity in aluminum production, but with EGA’s technical prowess, it could become a profit center. A successful feasibility study could see EGA monetize a byproduct worth up to $10–15 million annually per ton of gallium produced, depending on purity levels. This aligns with EGA’s broader pivot into critical minerals: the UAE’s $200 billion AI campus and its push into EV battery materials signal a shift toward tech-driven industrialization.

The Investment Case: RTX, EGA, and the Critical Mineral Play

Investors should see this partnership as a catalyst for three opportunities:

1. RTX’s Defense Growth: With gallium secured, RTX can accelerate programs like the Next Generation Air Dominance (NGAD) system and the Long-Range Anti-Ship Missile (LRASM), both of which rely on GaN/GaAs semiconductors. shows RTX’s resilience amid macroeconomic headwinds—a trend that could strengthen if gallium access reduces cost and delivery risks.

2. EGA’s Revenue Diversification: EGA’s move into gallium positions it as a leader in critical minerals, a sector projected to grow at 8–12% annually through 2030. Investors in UAE equities (e.g., via EGA or the Abu Dhabi Investment Authority) gain exposure to a region pivoting from hydrocarbons to high-tech industrial exports.

3. Critical Minerals as a Macro Trend: Gallium is just one of many critical minerals (cobalt, lithium, rare earths) in high demand for defense and tech. The RTX-EGA model—leveraging existing infrastructure to extract overlooked byproducts—could become a blueprint for securing supply chains in sectors from semiconductors to EV batteries.

Risks and Considerations

The feasibility study is a critical hurdle. If EGA cannot achieve high-purity gallium cost-effectively, the project’s economics collapse. Additionally, global gallium prices remain volatile, tied to Chinese production and tech demand. Investors should monitor for signals of oversupply or shortages.

Conclusion: Allocate Now to Capitalize on Supply Chain Realignment

The RTX-EGA MOU isn’t just about gallium—it’s about reengineering defense supply chains for resilience. By securing a non-Chinese source of a critical mineral, RTX reduces risk, accelerates innovation, and positions itself as a leader in next-gen defense tech. For investors, this is a rare opportunity to back a proven industrial player (RTX) and a rising critical minerals hub (UAE) at an inflection point.

Act now: allocate to RTX to benefit from its supply chain certainty, and consider UAE equities or ETFs exposed to critical minerals. The gallium boom is here—and those who move first will secure the spoils.