Hafnium: What Comes After the Price Record?

After a record high last year – driven by demand from the semiconductor and aerospace industries – the price of hafnium has stabilized at a high level following a short-term dip.

What are the reasons behind this development?

The massive price increase of hafnium at the end of 2022 was mainly due to the substantial rise in demand from the aerospace sector. While aircraft manufacturers had to hold back on orders during the COVID-19 pandemic, they had to stock up on raw materials in the past two years due to the rising passenger numbers of airlines. This boom is over; major aerospace companies are instead signing more long-term procurement contracts again, according to Frank Meier, technology metals expert at raw material supplier TRADIUM. In this field, short-term spikes in demand are unlikely in the near future.

This also applies to the second major application area, the chip industry. Here, hafnium tetrachloride is used as a coating for microchips. After record revenues in 2022—also driven by the previous supply bottlenecks caused by the pandemic—the semiconductor industry is currently struggling, likely affecting hafnium demand. However, according to the news agency Bloomberg, positive impulses in August this year pointed to rising demand for semiconductor chips. This development is strongly driven by the artificial intelligence sector, which requires high computing power. According to Bloomberg, TSMC, one of the world’s leading chip manufacturers, now generates more than half of its revenue from high-performance computing.

TRADIUM expert Meier also points out that hafnium production has now been expanded, providing more raw material to the market. This, in turn, affects the hafnium price, which has now stabilized significantly above the five-year average.