Counterattack of Resource Weaponization: A Topography of the Global Supply Chain Shaken by the Tungsten Wars > News

Tungsten is a metal that has both high strength and heat resistance, and is essential for the production of tungsten hexafluoride (WF6), a key material in the semiconductor manufacturing process. Recently, the industry was shocked when major Japanese materials companies Kanto Denka and Central Glass announced that they would permanently stop producing the material. This is a direct result of China introducing a licensing system for tungsten exports since February of last year and severely limiting actual shipments. The departure of Japanese companies, which accounted for a quarter of global tungsten hexafluoride supply, foreshadows a long-term supply shortage that will last until 2027. As a result, global semiconductor manufacturers, including Samsung Electronics and SK Hynix, are facing a major challenge in securing process materials.

China's export restrictions go beyond simple trade barriers and have the character of strategic pressure targeting specific countries. In fact, after the deterioration of China-Japan relations, China virtually completely blocked exports of tungsten powder and carbide to Japan. Japanese companies are working hard to diversify their supply chains, but are under severe management pressure, with costs nearly tripling as they search for alternative supply sources. Companies such as Sumitomo Electric have no choice but to pass on increased production costs to consumers, including raising tool prices by up to 60%. This resource weaponization strategy is weakening Japan's manufacturing competitiveness and, as a result, amplifying the instability of the entire global supply chain.

Meanwhile, it is very noteworthy that North Korea's tungsten exports to China are rapidly increasing amidst these supply chain disruptions. According to recent data from China's General Administration of Customs, the tungsten concentrate exported to China by North Korea from January to April of this year increased more than 13 times in volume compared to the same period last year. This figure pushed out North Korea's existing major export items, such as wigs and artificial eyelashes, and took the top spot in exports to China. Although the UN Security Council's resolution on sanctions against North Korea bans the export of major minerals such as coal and iron ore, North Korea is cleverly taking advantage of the fact that tungsten concentrate is excluded from regulation. China is also forming a symbiotic relationship by supplementing domestic supply shortages with North Korean resources and seeking efficiency in managing strategic minerals.

The Korean government and companies are also making multifaceted efforts to respond to this crisis. The Ministry of Trade, Industry and Energy is accelerating resource diplomacy by holding a Trade and Investment Cooperation Committee with Kyrgyzstan and strengthening cooperation in the supply chain of key minerals such as antimony and tungsten. In addition, it is expected that domestic material companies such as Foosung and SK Specialty will benefit from the disruption of Japan's material supply, but unless fundamental technological independence and supply chain diversification are achieved, there is a possibility that this will only be a temporary phenomenon. In addition to China's strengthening of its own gas production capabilities, which calls for the rise of semiconductors, reorganization of the entire value chain, from securing raw materials to materials production, has emerged as an urgent task for Korea.