Two Major Japanese Suppliers Halt Production, Tungsten Hexafluoride Prices Surge, Chinese Manufacturers May Benefit
N.R. Finch
Japan's Kanto Denka Kogyo and Central Glass plan to stop producing tungsten hexafluoride (WF6) on July 1, removing roughly 25% of global capacity; spot prices are surging and Chinese suppliers, who control upstream tungsten resources, stand to capture share.
What is WF6, and why is it suddenly in short supply?
Tungsten hexafluoride (WF6) is a specialty gas used to deposit tungsten onto chip circuits — essentially plating the tiny wires inside a chip with metal.
AI chips and multi-layer 3D NAND flash — stacking memory cells dozens of layers high — are both ramping fast. A single AI chip consumes two to five times the WF6 of a mature 28 nm chip.
This means → demand is accelerating while two major suppliers exit at once, blowing the gap wide open.
How big is the impact of Japan's shutdown?
Kanto Denka and Central Glass have combined annual capacity of roughly 2,000 tonnes, about 25% of the global total. They supply 6N-to-7N ultra-high-purity product to TSMC, Samsung and other top-tier fabs.
In plain terms = the highest-purity product used by the world's most demanding customers is about to lose a quarter of its supply.
The industry expects July–September 2026 to be the tightest window; the gap is unlikely to close fully before year-end, and prices will stay elevated.
Can other overseas suppliers fill the hole?
South Korea's SK Specialty and Foosung have already announced 70%–90% price hikes for 2026. Their capacity is earmarked for Samsung and SK Hynix domestic lines, with exports tightly controlled.
In Europe and the US, Versum (Merck), Linde and Air Products serve mainly local fabs. Very little flows into Asia.
This means → the remaining overseas capacity is spoken for — there is no spare pool to redirect to the broader market.
Will chipmakers be forced to cut output?
WF6 accounts for less than 1.5% of total chip manufacturing cost. Fabs can absorb steep price increases.
In plain terms = this material cost is a rounding error for a fab. Even a sharp price spike is unlikely to trigger production cuts. Fabs will lock in supply at higher prices and pass the cost through via chip pricing.
This reflects the near-zero "price-transmission friction" of WF6 — upstream hikes flow straight to the end product, giving suppliers strong pricing power.
Where is the opportunity for Chinese suppliers?
China controls over 80% of global tungsten resources and over 90% of high-purity tungsten powder refining capacity. Tungsten powder makes up 60%–70% of WF6 production cost.
This means → one key reason behind Japan's shutdown is China's tightening of tungsten export controls — the raw material is being squeezed.
Domestic suppliers capable of producing 5N-and-above high-purity WF6 are limited, chiefly Peric Specialty Gases (annual capacity ~2,000 tonnes, certified by multiple leading Chinese fabs) and Grandit.
What is the real test of this price cycle?
Near-term, Chinese suppliers may add incremental output through capacity optimization after Q4, but new capacity is constrained. The gap is unlikely to close fully before year-end.
Longer-term, Japan's exit is permanent — it opens a window for Chinese producers to take overseas orders and enter the mainstream global high-purity WF6 supply chain.
This reflects something bigger than a price rally — the supply chain itself is being restructured. Whether Chinese suppliers can truly capture these orders is the key variable for judging this cycle's lasting impact.
Content is for reference only, not financial advice.