According to globalsources.com, China’s tungsten export restrictions—introduced in 2025 and tightened for 2026 and 2027—are intensifying supply constraints that threaten semiconductor manufacturing for AI applications, with shortages projected to persist until at least 2028.
Supply shock disrupts key semiconductor inputs
A major disruption occurred on July 1, 2026, when Japan’s Kanto Denka and Central Glass suspended tungsten hexafluoride (WF6) production after exhausting feedstock. Together, the two firms accounted for approximately one-quarter of global WF6 capacity—or about 2,200 tons annually—highlighting how quickly upstream material shortages can halt downstream fabrication.
China controls roughly 80% of global tungsten supply, and its export policies have sharply reduced the number of companies authorized to ship the material overseas. This concentration has amplified vulnerability, especially as demand surges from both defense applications and AI-related semiconductor manufacturing.
WF6 is essential for chemical vapor deposition—a core process in producing advanced memory and logic chips. Without reliable access, manufacturers risk delays in expansion plans, adjustments to fab schedules, and higher input costs that ripple across enterprise servers, consumer electronics, and mobile devices.
Diversification efforts face long lead times
Almonty Industries has identified its Sangdong mine in South Korea as one of the largest non-Chinese tungsten sources; the company announced the mine reached full production in July 2026 and launched a share buyback on August 17.
Yet new mining and refining capacity outside China remains constrained by multi-year timelines for environmental reviews, permitting, financing, infrastructure development, and semiconductor-grade chemical processing. As a result, projects initiated in response to current shortages are unlikely to deliver meaningful volume before 2028.
Companies including Samsung and SK Hynix are actively qualifying alternative suppliers across regions, but procurement teams must now assess not only price—but upstream mine output, refining capacity, logistics networks, and compliance with semiconductor-grade purity standards.
Strategic implications for AI hardware supply chains
The tungsten shortage underscores that AI’s growth depends as much on physical supply chains as on computational advances. Raw materials like tungsten form part of the upstream foundation supporting chip production—alongside gases, chemicals, and specialized equipment.
For electronics manufacturers, resilience strategies now include multi-regional supplier qualification, enhanced visibility into tier-two and tier-three material sources, and dynamic inventory planning to absorb feedstock volatility. Export policy shifts and processing bottlenecks—rather than just demand spikes—have become decisive factors in lead-time forecasting.
The situation also reshapes investment priorities: capital is flowing toward non-Chinese mining, chemical synthesis, and refining infrastructure, though these initiatives will take years to affect market balance. As one industry assessment notes, “Trade restrictions can alter material availability relatively quickly, while developing alternative sources requires longer lead times.”
Source: globalsources.com
Compiled from international media by the SCI.AI editorial team.
