Executive Interviews

Asian Metal: Mr. Peng, thank you for joining this interview with Asian Metal. Could you briefly introduce the company’s current production status?

Mr. Peng: The company obtained its Safety Production Permit in November 2025. The project is being developed in two phases. Phase I represents a total investment of RMB60 million, with a designed annual capacity of 50 tonnes. It has now been completed and put into operation. Phase II is expected to require an additional RMB80–100 million investment, with planned capacity expansion to 200 tonnes within three years. Our tantalum pentachloride purity can reach 99.9999%, and the company serves as a deputy chief editor unit for the group standard on tantalum and niobium chlorides in the semiconductor industry. In 2026, output is expected to reach around 20 tonnes.

Asian Metal: Have there been any new policies regarding high-purity tantalum and niobium chlorides in China this year?

Mr. Peng: According to the Globally Harmonized System of Classification and Labelling of Chemicals (GHS) and international regulations on the transport of dangerous goods, tantalum and niobium chlorides are classified as Class 8 corrosive hazardous chemicals. Due to their strong corrosivity, destructive effects on metals, and potential inhalation toxicity, strict compliance with national hazardous chemical safety regulations is required throughout production, storage, transport, and usage. In the past, regulatory control was less stringent. However, the newly implemented Law of the People’s Republic of China on the Safety of Hazardous Chemicals, effective May 1, 2026, marks a new stage in China’s hazardous chemicals management. The law reflects a “whole-process, integrated governance” approach, covering production, storage, use, trading, transportation, and emergency response. This means that every stage of tantalum and niobium chloride handling—from factory entry to final disposal—will be subject to much stricter supervision.

Asian Metal: What are the main downstream applications in 2025, and what is the demand outlook for 2026?

Mr. Peng: The primary application of tantalum pentachloride is currently concentrated in the third-generation semiconductor silicon carbide (SiC) coating segment, which has become its most important end-use market. In SiC crystal growth processes, 6-inch substrate production using tantalum materials is already well established. However, 8-inch SiC crystal growth and epitaxy processes require more rigid demand for tantalum pentachloride-derived tantalum carbide (TaC) coatings. These coatings are used in graphite crucibles and other hot-zone components, extending service life by 17 times compared with conventional SiC coatings, with no mature substitute currently available. In addition, tantalum pentachloride is used in advanced semiconductor manufacturing as a precursor for CVD/ALD processes to produce tantalum nitride (TaN) and tantalum carbonitride (TaCN) barrier layers. It is also a key raw material for PDMAT (pentakis(dimethylamido)tantalum), an important precursor in advanced integrated circuits, memory chips, 45nm and below CMOS processes, and copper interconnect technologies. Demand is also growing steadily in chlor-alkali catalysts, optical coatings, ultra-high temperature ceramics, and titanium anodes. Benefiting from a global CAGR of 14.60% in third-generation semiconductors (2024–2030) and accelerating SiC industry development, we expect tantalum pentachloride demand to grow by 10–15% in 2026. It is also used in medical porous tantalum, aerospace ultra-high temperature ceramics, and titanium anodes. Niobium pentachloride is mainly used in semiconductor CVD/ALD precursors, superconducting materials (niobium superconducting cavities), high-temperature alloys, multilayer ceramic capacitors (MLCC), and organic synthesis catalysts. Our niobium pentachloride purity can reach 99.999%, meeting requirements across different applications.

Asian Metal: In Q1 2026, tantalum and niobium raw material prices rose sharply. What were the main reasons?

Mr. Peng: On one hand, mining disruptions and seasonal rainfall in Africa reduced supply. On the other hand, downstream demand provided support. Together, these factors drove prices higher. Currently, tantalum pentoxide CIF China prices have exceeded USD250/lb.

Asian Metal: Will rising raw material prices affect end-user demand?

Mr. Peng: Yes, higher raw material prices have affected some downstream demand. About half of our customers anticipate price increases and therefore place orders six months in advance. We also secure upstream raw materials based on customer orders. However, the other half of customers do not accept sustained price increases and only purchase on an as-needed, small-volume basis.

Asian Metal: How will you adjust product pricing in response to rising raw material costs?

Mr. Peng: Due to the very high purity requirements in the semiconductor industry, we must use strictly selected and customized raw materials. We maintain some inventory and continuously procure at different price levels. However, raw material prices have risen too quickly, forcing us to sacrifice part of our margins to retain customers. We cannot fully pass through cost increases to downstream users.

Asian Metal: Raw material prices declined slightly in mid-Q2. What is the reason?

Mr. Peng: As most end-users purchase on demand, procurement activity slowed compared with the early-stage price rally in Q1. In addition, some traders who had previously stockpiled raw materials liquidated inventories for profit-taking, leading to a slight price correction.

Asian Metal: What is your outlook for the tantalum and niobium market in the second half of the year?

Mr. Peng: Recently, tantalum and niobium raw materials have remained at high and volatile levels. New mining policies in Africa have tightened supply, so I expect prices to remain elevated in the second half of the year. However, when metallic tantalum approaches RMB7,000/kg or higher, high raw material costs will significantly weaken downstream willingness to restock, resulting in passive demand contraction. In that case, prices lacking real transaction support may experience a high-level correction.

Asian Metal: What is the company’s future development strategy?

Mr. Peng: We will focus on developing and servicing semiconductor customers. First, we will leverage our technical team from Central South University to provide high-end customized solutions, deeply participate in downstream applications, and help customers maximize product utilization with full after-sales technical support. Second, we will further diversify and segment our product portfolio, producing different grades and types according to customer requirements. We will pursue a differentiation strategy to provide the most suitable products for different applications. In the future, we aim for exports to account for 20–30% of total sales, domestic sales 50–60%, and to capture over 40% of the Chinese market.