Key facts
- China's tungsten export curbs are causing supply shortages and price increases for tungsten hexafluoride.
- Tungsten hexafluoride is a critical precursor gas for advanced AI chip manufacturing.
- Two Japanese companies, Showa Denko Kanto and Central Glass, are considering halting production of the gas.
- Japan's tungsten imports from China have significantly decreased.
- Finding alternative suppliers for tungsten has proven difficult for Japanese firms.
Two major Japanese manufacturers of specialty gases, Showa Denko Kanto and Central Glass, are reportedly planning to suspend production of a gas crucial for AI chipmaking in July due to dwindling inventories. This potential disruption stems from China's export controls on tungsten, which have caused significant supply bottlenecks and a more than 200% year-on-year surge in the price of tungsten hexafluoride.
The gas, particularly the 99.999% purity variant, is essential for creating microscopic connections in advanced AI chips manufactured on 3- to 7-nanometre processing nodes. Market data indicates the price has more than tripled from a year ago, exceeding 1,700 yuan (US$251) per kilogram. These Japanese firms have already alerted major chip manufacturers, including Samsung Electronics and DB HiTek, about the potential supply issues.
Japan's reliance on China for tungsten is highlighted by a 50% drop in imports from China in April compared to the 2025 monthly average. Efforts to secure alternative suppliers have been challenging, as China dominates global reserves and production of tungsten, the primary raw material accounting for over 60% of tungsten hexafluoride's production costs.