A critical gas for semiconductor manufacturing, tungsten hexafluoride (WF6), is facing a severe supply shortage and soaring prices.
This situation began with a fundamental policy shift in China. In early 2025, the Chinese government implemented a strict export licensing system for tungsten-related products, requiring a separate permit for each shipment. This, combined with mining quotas, structurally limited the amount of tungsten available to the rest of the world. Tungsten is the essential raw material for WF6 gas, which is used to form microscopic metal wiring on silicon wafers.
The immediate effect was a sharp spike in the price of the raw material. The benchmark price for Ammonium Paratungstate (APT), a key tungsten intermediate, surged by over 200% in 2025. This dramatic increase in raw material costs created a powerful upward pressure on the price of the final product, WF6, which we are seeing today.
Two major factors have accelerated this crisis. First is the surging demand for advanced semiconductors, driven by the AI and HBM (High Bandwidth Memory) boom. As chip designs become more complex, they require more tungsten, intensifying the competition for a limited supply. Second, geopolitical tensions have played a crucial role. China has recently tightened its export controls on dual-use items destined for Japan. This is significant because Japanese suppliers account for about 20-25% of the global WF6 market, and any disruption to their operations has a major ripple effect.
As a result of this perfect storm—high raw material costs, strong demand, and reduced supply from Japan—Korean material suppliers have been forced to raise their contract prices by a staggering 70-90%. Korean chipmakers are now scrambling to secure their supply, with some reportedly turning to Chinese sources as a buffer. This episode highlights how geopolitical strategies around critical materials can directly impact the high-tech supply chain and create significant cost burdens for manufacturers worldwide.
- Tungsten Hexafluoride (WF6): A gas used in semiconductor manufacturing to deposit a thin layer of tungsten metal, which acts as wiring connecting the billions of transistors on a chip.
- Ammonium Paratungstate (APT): The primary raw material derived from tungsten ore, which is then processed to create tungsten metal powder and, ultimately, WF6 gas.
- Wafer Fab Equipment (WFE): The set of complex machinery used to fabricate semiconductor chips on silicon wafers. The demand for WFE is a key indicator of the semiconductor industry's investment and growth.