Tungsten supply crisis deepens as AI boom takes toll on global market
Tungsten, a critical input for manufacturing high-performance semiconductors, is running dangerously low on the global market. Prices have surged as much as 622% in 2026, driven by a collision of , export restrictions, rising military demand, and the insatiable appetite of AI chip fabrication.
The perfect storm
controls roughly 80% of the world's tungsten supply, but export restrictions imposed in 2025 have limited the number of firms permitted to ship tungsten abroad to just 15 companies. This has created a bottleneck in the global market, with two major and ceasing operations entirely in July 2026 due to a lack of tungsten.
Military demand and AI chip fabrication
The ongoing conflicts involving and have pushed defense-related tungsten demand higher, while the AI industry's demand for advanced semiconductors has been climbing at a pace that makes "exponential" feel like an understatement. Tungsten hexafluoride, known as WF6, is used in chemical vapor deposition during chip manufacturing, and its production is tightly linked to the global supply of tungsten.
Limited alternatives and a long development pipeline
For semiconductor manufacturers like , and , tungsten is embedded in their production processes, and there's no quick substitute. Both companies are reportedly under pressure to diversify their supply chains, but alternatives to 's tungsten are limited and slow to develop. , which brought its mine in to full production in July 2026, is one company positioning itself as part of the solution, but its output remains limited compared to the volume that 's restrictions have removed from the market.
Structural deficits and a growing demand
Global tungsten demand is projected to grow from approximately 143,000 tons in 2025 to 210,000 tons by 2035, with structural deficits anticipated through at least 2028. The development pipeline for new tungsten projects outside is thin, and the lead times are measured in years, not quarters.
