CITIC SEC: The suspension of the supply of Japanese tungsten hexafluoride and nitrogen trifluoride triggers a price surge, domestic manufacturers' overseas business is expected to accelerate.

CITIC SEC released a research report stating that tungsten hexafluoride and nitrogen trifluoride are the two largest categories of electronic specialty gases in the market, and they are core materials for the manufacture of advanced logic and storage chips. Regarding tungsten hexafluoride, after China strengthened tungsten export control in February 2025, the cost of tungsten powder, accounting for 60%-70% of the tungsten cost, continued to rise, leading to a continuous increase in the downstream price of tungsten hexafluoride. In January 2026, China strengthened tungsten export control to Japan, which may lead to a supply interruption or a potential complete shutdown of Japan's global capacity, accounting for nearly 30%. It is predicted that the global price of tungsten hexafluoride will further increase significantly, while accelerating the domestic substitution and overseas business processes of tungsten hexafluoride. As for nitrogen trifluoride, Mitsui Chemical's exit from the nitrogen trifluoride business and the explosion incident at the Kanto Denka Sechikuawa plant's nitrogen trifluoride unit will create a supply gap of several thousand tons globally, bringing potential market opportunities of increased volume and price for domestic nitrogen trifluoride suppliers. CITIC SEC's main points are as follows: Tungsten Hexafluoride: Overall supply shortage; possible shutdown of Japan's nearly 30% capacity, which may further ignite price hikes. Demand side: According to DiMarket's forecast, the global market size of tungsten hexafluoride will exceed $2 billion by 2033, with a CAGR of 17.6% from 2025 to 2033. According to TECHCET, global demand for tungsten hexafluoride will increase from 4,620 tons in 2020 to 8,901 tons in 2025, with an average annual growth rate of 14%. Price increase: Tungsten powder costs account for 60%-70% of the total cost, after China strengthened tungsten export control in February 2025, tungsten powder prices continued to rise, with a price increase of 239.71% from the beginning of 2025 to the end of the year, and a price increase of 120.66% from the beginning of 2026 to April 1. The price increase of tungsten powder is transmitted downstream, and the price of tungsten hexafluoride rose from around 47,000 RMB/ton at the beginning of 2025 to around 90,000 RMB/ton in November, with a price increase of 91%. In January 2026, after China strengthened tungsten export control to Japan, the supply of raw materials was interrupted, which may result in a complete shutdown of Japan's nearly 30% global capacity, further widening the global supply gap of tungsten hexafluoride. It is predicted that the global price of tungsten hexafluoride will further increase significantly, while accelerating the domestic substitution and overseas business process of tungsten hexafluoride. Nitrogen Trifluoride: Shutdown of two major Japanese manufacturers may drive price increases. Demand side: According to FortuneBusiness Insights data, the global market size of nitrogen trifluoride in 2025 was $2.15 billion, and it is expected to grow from $2.42 billion in 2026 to $6.45 billion in 2034, with a high CAGR of 13.01%; it is estimated that global demand for nitrogen trifluoride will reach 63,700 tons in 2025, corresponding to a CAGR of around 15% from 2020 to 2025. Price increase: Mitsui Chemical's exit from the nitrogen trifluoride business and the explosion incident at the Kanto Denka Sechikuawa plant's nitrogen trifluoride unit will create a supply gap of 5,400 tons globally (based on the statistics of the existing capacity of the two companies), bringing potential market opportunities of increased volume and price for domestic nitrogen trifluoride suppliers. Risk factors: - Domestic substitution process slower than expected - Increased restrictions on the semiconductor industry by the US against China - Intensified industry competition - Risk of declining gross profit margins due to falling product prices - Risk of rising prices of major raw materials