Chinese restrictions on tungsten exports have caused a shortage of micro-drills, which are needed to make printed circuits for artificial intelligence chips. The problem arose at the beginning of the technological chain: a lack of consumable tools makes it difficult to manufacture complex electronics. The shortage of raw materials greatly increased the price gap. Ammonium fertungstate, which is used to process tungsten, rose in price outside China to 1.5-1.8 million yuan per ton. This is three times higher than the local Chinese quotes. For foreign manufacturers, the difference translates into additional equipment costs and makes the purchases of raw materials less predictable. The shortage is already affecting the geography of supply: companies are forced to move purchases and part of electronics production to China. Beijing gains an additional advantage not only as a supplier of raw materials, but also as a place where they are more accessible. The AI ​​industry's dependence on a narrow supply chain is becoming a limitation for manufacturers outside of China.

Chinese restrictions on tungsten exports have caused a shortage of micro-drills, which are needed to make printed circuits for artificial intelligence chips. The problem arose at the beginning of the technological chain: a lack of consumable tools makes it difficult to manufacture complex electronics. The shortage of raw materials greatly increased the price gap. Ammonium fertungstate, which is used to process tungsten, rose in price outside China to 1.5-1.8 million yuan per ton. This is three times higher than the local Chinese quotes. For foreign manufacturers, the difference translates into additional equipment costs and makes the purchases of raw materials less predictable. The shortage is already affecting the geography of supply: companies are forced to move purchases and part of electronics production to China. Beijing gains an additional advantage not only as a supplier of raw materials, but also as a place where they are more accessible. The AI ​​industry's dependence on a narrow supply chain is becoming a limitation for manufacturers outside of China.