Vietnam's Tungsten Monopoly Challenge: The AI Supply Chain Crisis

The AI boom has a raw materials problem. Everyone is focused on chips, servers, and data centers. But the metals inside those chips? That's where a quieter race is playing out.

Tungsten is one of them. This dense, heat-resistant metal is essential to advanced semiconductor manufacturing. It's used in the tiny wires and barriers inside chips that power AI accelerators. Without it, the AI infrastructure buildout stalls. And right now, Vietnam sits at the center of the global scramble to secure it.

China Tightened Its Grip, and the Market Exploded

China controls 80% of global tungsten production and 85% of its refining capacity. In February 2025, Beijing imposed strict export controls, restricting tungsten shipments under 41 trade codes and requiring special licenses. Only 15 companies were authorized to export for 2026 and 2027.

The market reacted immediately. The price of ammonium paratungstate (APT, the key intermediate tungsten product used in chip manufacturing) surged from around US$340 per metric tonne unit at the end of 2024 to over US$3,100 by early 2026. That's nearly a 10x increase in 12 months. In Europe, APT prices rose 223% in just the first three months of 2026.

The U.S. is now expected to exhaust its stockpiled tungsten reserves by 2026. The Pentagon has activated the Defense Production Act to begin emergency strategic stockpiling.

Vietnam's Nui Phao Mine Is Now a Strategic Asset

Masan High-Tech Materials (MSR) operates the Nui Phao polymetallic mine in Tuyen Quang province, about 150 kilometers north of Hanoi. The mine controls roughly 21% of the global ex-China tungsten supply chain and holds approximately 30% of non-Chinese tungsten resources worldwide. That makes MSR the single most important non-Chinese tungsten supplier on the planet.

MSR executives put it plainly: "In every gold rush, the biggest gains are not always captured by those digging for gold, but by those supplying the tools that make the digging possible." They're positioning tungsten not as a commodity but as picks-and-shovels infrastructure for the AI economy.

The numbers back that confidence. MSR is targeting revenue of US$607 to US$771 million in 2026, nearly tripling year-on-year. After-tax profit is projected at US$64 to US$95 million, compared to near-breakeven results in 2025. The company is also planning to move from Vietnam's secondary UPCoM market to the main Ho Chi Minh City Stock Exchange, and Masan Group is actively seeking a strategic foreign investor.

Vietnam Is Rewriting Its Role in Global Supply Chains

What's happening with tungsten is part of a broader strategic shift. Vietnam holds an estimated 17% of the world's known rare earth reserves and was the world's second-largest tungsten producer as recently as 2022. For years, it exported raw materials with little domestic processing.

That is changing fast. In December 2025, Vietnam banned exports of unprocessed rare earths, a deliberate move to build domestic refining capacity and capture more value. In January 2026, the EU upgraded its partnership with Vietnam to comprehensive strategic status, with sustainable mining cooperation explicitly included.

Vietnam is copying the Chinese playbook: restrict raw material exports, force domestic processing, attract foreign technology investment. But it's pitching itself to the West as the trustworthy alternative.

The AI sector is paying attention. Critical minerals are now ranked the number one data center risk for 2026, with supply chain vulnerabilities increasingly seen as an existential threat to AI infrastructure timelines.

Analysts at BMO forecast a supply deficit in 2026, with a three to five year gap before non-Chinese tungsten supply can scale enough to fill the void. For Asian companies that control those reserves, the window is open right now.