Supply heavily depends on the Middle East, hoarding cannot solve the problem, and helium supply disruptions are troubling the global AI industry.

How Middle East Conflict Exposes the Fragility of the Helium Supply Chain

【Global Times Reporter Ni Hao, Special Correspondent Ren Zhong】“The global tech industry could become the latest victim of the US-Israel-Iran conflict,” said Morningstar, a US investment research and financial data provider, in an article. The situation in the Middle East is adding new pressure to the semiconductor supply chain and could even hinder the rapid development of artificial intelligence. According to the Associated Press, Iran’s previous attacks on Qatar’s natural gas export facilities not only disrupted global energy markets but also affected the global tech industry supply chain, as helium, a byproduct of natural gas, is vital to many high-tech industries including semiconductors.

Cannot stockpile like oil; inventories will “gradually run out”

On the 23rd, the U.S. National Interest website reported that while international attention is focused on the Strait of Hormuz for oil, liquefied natural gas, and fertilizer shipments, few realize that this waterway is also a critical “pressure point” for semiconductor manufacturing, aerospace production, and other technological and industrial sectors. Helium is rapidly becoming the next key industrial bottleneck globally, and ongoing tensions in the Middle East are bringing this long-overlooked vulnerability to the forefront.

According to a report released by Deutsche Bank on the 23rd, helium is a crucial raw material for semiconductor manufacturing, used to create ultra-clean inert environments during chip production, with no current substitutes available.

Additionally, data from the US Geological Survey indicates that Qatar supplies one-third of the world’s helium. Due to multiple attacks, Qatar’s natural gas facilities have suffered severe damage, with repairs expected to take years, and helium exports are projected to decrease by 14% annually.

Globally, the main sources of helium are the US, Qatar, and Russia. However, the US mainly supplies its domestic market, and Russia’s supply has declined significantly due to underinvestment and sanctions. This makes Qatar the central hub for helium supply to Asia’s semiconductor industry.

“That makes things worse,” said Kornbluth Helium Consulting President Phil Kornbluth, as reported by the Associated Press. “The most optimistic scenario is that production could resume partially in about six weeks, but the likelihood of that happening is very low.” Kornbluth added that since the outbreak of the US-Israel-Iran conflict, spot helium prices have doubled and may continue to rise.

Furthermore, the US National Interest reports that helium storage and transportation conditions are extremely demanding. This means that helium sales depend on efficient logistics, precise delivery schedules, and good storage management, unlike crude oil or grain, which can be stockpiled to buffer disruptions. The report suggests that under continued Middle East tensions, helium inventories will not simply decrease but will gradually be exhausted.

Samsung, TSMC face “supply anxiety”

Deutsche Bank’s report shows that major Asian chip economies are highly dependent on Qatar, with South Korea importing 65% of its helium from Qatar, and Japan between 28% and 33%. Disruptions in Qatar’s helium supply are pushing key global chip manufacturing regions like South Korea and Japan toward potential production crises.

“Interruptions in the supply of critical industrial gases like helium and bromine pose risks to South Korean chip manufacturers,” reported The Korea Herald on the 24th. Samsung Electronics and SK Hynix, two major memory chip producers, say they have enough helium stockpiled to withstand several months of supply disruptions. However, industry officials warn that given the sector’s high dependence on the Middle East, prolonged crises could tighten supplies and drive up costs.

On the 22nd, US MSN reported that TSMC relies heavily on helium in its semiconductor manufacturing process. Any risk of sustained helium supply disruptions could significantly impact TSMC, which produces most of the world’s advanced AI chips for companies like Nvidia and AMD. Analysts warn that a disruption in the helium supply chain could pressure Nvidia. TSMC responded, “We currently do not expect any major impact,” but will continue to monitor the situation closely.

AI Economy Faces Tests

Morningstar’s report states that if the Middle East supply disruptions persist long-term, both the tech industry and AI investment trends will be severely affected.

According to US National Interest, AI depends on a manufacturing ecosystem built around gases, chemicals, precision tools, controlled environments, and highly specialized logistics. Helium is the quiet but indispensable element that keeps this ecosystem running. Nvidia has projected that by 2027, its AI chips could generate over $1 trillion in revenue. Regardless of the final number, the trend is clear: more AI infrastructure requires more advanced chips, which in turn puts greater pressure on upstream manufacturing systems. Helium is undoubtedly a key factor in the success or failure of the AI economy.

“‘Long-term’: this is a word no tech investor wants to hear,” said Dan Ives, Chief of Global Technology Research at Wedbush Securities. “If this conflict continues into May, there will be supply chain issues for some critical materials in AI development. If it ends before mid-April, it’s just a minor hiccup.”

David Roche, President of Quantum Strategies, said, “Even if production resumes tomorrow, a full recovery of the supply chain will take 4 to 6 months.” He further added, “This is a crisis involving an extremely important and irreplaceable raw material, affecting sectors like technology and healthcare. Chip manufacturing is the most urgent issue right now.”