A recent report by Caitong Securities Co.,Ltd. highlights that the demand for tungsten hexafluoride is driven by two key factors: wafer shipment volumes and the consumption rate per chip in advanced manufacturing processes. Domestic Chinese companies, leveraging local resource advantages, are progressively mastering the mass-production technology for high-purity products ranging from 5N to 7N grades. This is enabling them to gradually replace imports from Japan and South Korea, positioning them as the core force in global market supply and potentially shifting the industry's supply structure from foreign dominance to domestic leadership.
Against the backdrop of accelerated AI application adoption fueling the expansion of computing chips and advanced memory, tungsten hexafluoride, as a critical electronic specialty gas, is expected to benefit from the dual advantages of surging demand and domestic substitution. The report outlines several key perspectives, beginning with the fact that tungsten hexafluoride is a core precursor in chemical vapor deposition processes, used to deposit dense and uniform tungsten films on silicon wafers to build interconnect structures and facilitate electrical signal transmission. The complete industrial chain for tungsten hexafluoride is structured in three layers: upstream raw material mining and purification, midstream gas synthesis and refining, and downstream packaging and application. The upstream segment accounts for over 60% of production costs and represents the most critical resource barrier, while the midstream relies on high-precision chemical engineering, and the downstream is constrained by hazardous chemical regulations and customer certification requirements.
The report also indicates that demand is expected to continue growing, driven by AI. Global consumption of tungsten hexafluoride has risen from 4,620 tonnes in 2020 to 8,901 tonnes in 2025, nearly doubling in five years with a compound annual growth rate of 14%, according to industry data. The rapid global expansion of AI computing infrastructure, coupled with rising demand for servers and memory chips, higher 3D NAND stacking layers, and the explosion in demand for HBM high-bandwidth memory and advanced AI accelerators, has significantly increased the consumption of tungsten hexafluoride per chip. Market data from PW Consulting estimates the global high-purity tungsten hexafluoride market at $700 million in 2025, projected to reach $1.18 billion by 2032, achieving a steady compound annual growth rate of 7.4% during this period.
Furthermore, multiple supply constraints are favorable for domestic substitution. Global tungsten resources are highly concentrated in China. Due to domestic export controls on tungsten raw materials and stricter environmental policies, overseas leading manufacturers have been exiting the market. In contrast, domestic companies, with access to local resources, are gradually breaking through in high-purity production technology, replacing imports and becoming the primary suppliers globally. This is expected to shift the supply structure from overseas monopoly to domestic enterprise dominance.
The report also notes that given the supply-demand mismatch, tungsten hexafluoride prices are likely to remain elevated. Tungsten powder is a critical cost factor, accounting for approximately 60% to 70% of production costs. Despite a significant correction in tungsten powder prices since 2026 after initial rises and rapid spikes, the current raw material cost baseline remains notably higher than earlier lows in early 2025, providing strong support for tungsten hexafluoride prices. As of August 28, 2026, the domestic price for 5N grade tungsten hexafluoride is approximately 1,800 yuan per kilogram, up 100% since the beginning of the year, while 6N grade is about 2,250 yuan per kilogram, an increase of 135%.
Potential risks include weaker-than-expected downstream demand, slower-than-anticipated AI adoption, significant fluctuations in raw material prices, intensified industry competition, delays in new material development and domestic substitution progress, project implementation and validation delays, lower downstream capital expenditure, and the emergence of new technological alternatives.