China’s Tungsten Curbs Squeeze AI Chip Supply Chain

Tungsten’s heat resistance and hardness make it essential for contact plugs, interconnect structures and tungsten hexafluoride gas used in advanced chipmaking. China accounted for about 79% of global mined output in 2025, according to the US Geological Survey. That concentration has become a strategic vulnerability as demand from AI processors and next-generation memory chips increases, exposing manufacturers to shortages and higher costs when Chinese material is delayed or unavailable.

China’s Ministry of Commerce and General Administration of Customs imposed licensing controls on 25 products and related technologies across tungsten and four other metals on Feb. 4, 2025. USGS data show Rotterdam ammonium paratungstate prices climbed from $331 to $675 per metric ton unit during 2025. European companies are broadening overseas sourcing and recovering more scrap under the EU Critical Raw Materials Act, which targets 25% recycling capacity by 2030, while chipmakers accelerate research and qualification of molybdenum as a substitute for tungsten in selected processes.