China’s recent tightening of export controls on tungsten has sharpened concerns over supply-chain stability across the semiconductor and defense industries. Tungsten’s high melting point and hardness make it a critical material for advanced chip manufacturing as well as defense and aerospace applications.
In Taiwan, that pressure has been compounded by a recent incident involving Jing Yuan Tungsten Cobalt, a local ammonium paratungstate, or APT, producer. The development has added uncertainty to the domestic tungsten materials supply chain. In that setting, Lianyou Metals (7610), which specializes in tungsten and cobalt recycling and smelting, has drawn market attention. The company uses waste-recovery technology to sustain stable profitability and high gross margins, and the report describes it as an important part of the non-China supply chain.
Tungsten controls ripple through chip materials supply
Tungsten plays a key role in advanced semiconductor manufacturing. The report says 3 nm processes and 3D NAND flash memory production rely on tungsten feedstock to make tungsten hexafluoride, which is then used to produce nanoscale tungsten plugs that carry electrical current. Global tungsten mining and processing remain heavily concentrated in China. As Beijing expands export reviews on dual-use materials, international tungsten prices have been trending higher.
The market has also circulated reports that Japanese chemical companies Kanto Denka and Central Glass, constrained by Chinese export controls on raw materials, announced a permanent halt in production of tungsten hexafluoride, a critical material in chip manufacturing. That has raised concerns over possible supply disruptions for high-end chips.
Jing Yuan incident adds local supply uncertainty
As global tungsten materials supply tightens, Taiwan’s domestic tungsten and cobalt recycling sector is also facing structural changes. Jing Yuan Tungsten Cobalt, based in Pingtung, has annual production capacity of 4,000 tons. The report says the company’s head was recently killed. It also identifies Jing Yuan as Taiwan’s only company capable of refining waste materials into APT, an important intermediate material in the tungsten industry.
With export controls abroad and operational changes at a local supplier happening at the same time, the need for resilience and alternatives in Taiwan’s local tungsten materials supply chain has increased. Downstream companies are showing a clearer shift toward localized procurement, according to the report.
Lianyou Metals posts 73.88% gross margin
Founded in 2018, Lianyou Metals operates on a circular-economy model. It buys industrial waste from domestic and overseas markets and refines it into sodium tungstate and cobalt sulfate. The company is currently one of the world’s top three sodium tungstate manufacturers outside China and was listed on Taiwan’s Innovation Board in early September last year.
Financial data cited in the article show that because scrap acquisition costs are lower than the cost of mining primary ore, Lianyou’s gross margin reached 73.88% in the first quarter of 2026. Earnings per share for the quarter were NT$10.87. In figures released in early July, June consolidated revenue came to NT$750 million, up 22% month on month and 555% year on year. Second-quarter 2026 consolidated revenue reached NT$1.9 billion, up 92% from the previous quarter and 450% from a year earlier, both record highs.
The stock at one point climbed to a record NT$2,730. It closed at NT$1,660 on July 24.
Company points to Pingnan No. 2 plant as second-half driver
Lianyou Metals said demand from artificial intelligence, aerospace, defense and high-end automation helped push second-quarter consolidated revenue to a record for a single quarter, reflecting what it described as a structural growth opportunity tied to the reshaping of the global tungsten supply chain.
The company estimates that after its Pingnan No. 2 plant begins operations in the third quarter, annual sodium tungstate capacity will increase by about 20%, becoming its main growth driver in the second half of 2026.