More than defense - How Almonty's tungsten makes AI chips from Intel and Micron possible

Modern chips are unthinkable without tungsten

In semiconductor manufacturing, tungsten is used in various forms to improve the performance, stability, and reliability of components. A key application is the deposition of thin films and plugs, which serve as connections between the different layers of chips. This is mainly done by means of chemical vapor deposition. This is a precision process in which gaseous starting materials are deposited on a substrate in a reaction chamber. Tungsten hexafluoride serves as the primary starting point for tungsten deposition. According to the International Tungsten Industry Association, demand for tungsten hexafluoride has risen steadily in recent decades and has multiplied. Tungsten silicide is also important for the chip industry. It is used in transistors and ensures that these components become smaller and smaller and that the speed within circuits remains high.

Production losses at Intel or Micron would be a disaster

Since the market for tungsten has so far been dominated mainly by China, Russia, and North Korea, and China has only this year begun to make the export of tungsten considerably more difficult, companies in the chip industry are also concerned about supply bottlenecks. Production stoppages would affect not only chip manufacturers such as Intel but also suppliers of high-performance memory such as Micron. The latter company is vital for AI infrastructure, among other things, as AI chips rely on fast memory chips. If production at one or more plants were to come to a standstill, the consequences would be severe. In addition to immediate price increases for chips, innovation in the chip industry would also be at risk in the medium and long term. For example, Intel's modern chips with Angström architecture rely on tungsten silicide – without tungsten, peak performance is impossible.

Such a sudden halt in the chip market could also threaten the infrastructure or strategic security of entire countries in the medium term. Critical systems such as power plants, dams, and airports are already fully digitalized and depend on uninterrupted chip supplies. A tungsten shortage would force manufacturers to rapidly rethink and realign their existing supply chains. Without real security of supply for basic raw materials like tungsten or its refined products, shareholders of Intel, Micron, and Co. are unlikely to remain content.

Almonty Industries expands its offering – Three mines by the end of the year?

The globally active tungsten producer Almonty Industries will bring its Sangdong mine in South Korea into production in the coming weeks. The project is considered the largest tungsten mine outside China and, after its expansion, which is scheduled for completion in 2027, is expected to account for 40% of tungsten supply outside China. The tungsten market is currently undersupplied by around 5,570 tons. Even the commissioning of Sangdong will, at best, only partially ease this market imbalance. Demand is rising too sharply, especially from the defense sector. Whether it is ammunition, armor, turbines, or drones—tungsten is indispensable. Added to this are the numerous plans for new AI data centers. SAP, Amazon, and OpenAI recently announced their intention to establish an AI infrastructure in Germany, including data centers in Brandenburg.

It is likely due to these outstanding market prospects that tungsten producer Almonty is exploring the acquisition of another mine in the US. By year-end, the Company could be broadly diversified with Panasqueira in Portugal, Sangdong in South Korea, and the as-yet-undisclosed new US project, giving it a global footprint to meet soaring tungsten demand. Even though Almonty has primarily been viewed as a beneficiary of military rearmament in recent months, the megatrends of digitalization and AI are also driving demand, supporting the Company as it prepares to relocate its headquarters to the US.

International Investment Forum offers direct line to Almonty's CEO

Investors will soon be able to ask Almonty CEO Lewis Black directly about the Company's future strategy. The entrepreneur and recognized tungsten expert will be presenting live at the 16th virtual International Investment Forum (IIF) on October 8. Although the share price has multiplied since the turn of the year, analysts have repeatedly raised their price targets. The reason: There is hardly any alternative to Almonty due to the quality of its properties and its unique expertise in the difficult-to-mine and difficult-to-process metal tungsten.