Tungsten Supply Shortage Looms Behind AI Boom: Two Japanese WF₆ Producers Halt Production, Worsening Supply Chain Crisis
BlockBeats News, August 24th. According to a report by ZeroHedge citing Almonty Industries CEO Lewis Black, the global tungsten supply is facing a severe shortage. The demand for tungsten in AI, semiconductor, and defense industries continues to grow, while China's dominant position in tungsten raw material supply has further amplified global supply chain risks.
This year, the U.S. strategic reserves inquired about purchasing tungsten from the market. However, due to tight spot supply, continuous price increases, and the potential market disruption from large-scale government purchases, the related actions were not ultimately carried out. Industry insiders stated that non-Chinese sources of tungsten available to the West are limited, and a significant amount of supply has already been locked in.
The supply risk in the semiconductor industry is also prominent. Tungsten Hexafluoride (WF₆) is a key material used in the advanced storage chip manufacturing process to form micro-scale tungsten interconnects. The two Japanese companies, Kanto Denka and Central Glass, previously supplied approximately a quarter of the global WF₆. However, due to the inability to obtain the high-purity tungsten powder necessary for production, both companies ceased production starting from July 1. The relevant raw materials mainly come from China, which has tightened tungsten-related exports since 2025.
Currently, Samsung and SK Hynix are expediting the search for and certification of new WF₆ suppliers. The market expects WF₆ prices to rise by 70% to 90% in the second half of the year. Meanwhile, a Chinese company has announced plans to add 1,000 tons of WF₆ production capacity annually.
The tight tungsten supply is also spreading to Japan, Europe, and the U.S. hard alloy and tool industries. The price of APT (Ammonium ParaTungstate) in Western markets remains above $3,000 per metric ton unit (mtu WO₃), and some companies are facing raw material shortages. Industry experts believe that the short to medium-term tungsten demand has low price elasticity, meaning that even with price increases, downstream manufacturing industries such as automotive and aerospace will find it difficult to reduce procurement.
The report points out that tungsten is not only used in defense and semiconductors, with about 60% of U.S. tungsten demand and approximately two-thirds of global tungsten demand used in hard alloys, including industrial products such as cutting tools and drill bits. As AI, defense, and advanced manufacturing industries expand, the importance of the global tungsten supply chain is further increasing.
