Massive surge! Electronic component stocks move early in the morning as helium supply disruptions affect production

On April 1, the electronic components sector saw unusual intraday movement, and a batch of individual stocks surged in large numbers. By the close of trading this morning, the sector was up 3.04%, with gains among the top performers in the market. As for individual stocks, Benchuan Intelligent rose more than 13%, Jingsai Technology rose more than 11%, Zhongjing Electronics hit the daily limit, Yihao New Materials rose more than 8%, while Zecheng Electronics, Zhongying Technology, Yidian Electronics, and Faraday Electronics, among others, rose more than 5%, and many others including Xiehe Electronics, Zhongfu Circuits, Mingyang Circuits, and Ultrasonic Electronics, among others, rose more than 4%.

Helium supply disrupted, affecting the semiconductor industry

Amid the conflict between Iran and the U.S., the procurement and cost pressures of key materials in the semiconductor industry are raising concerns. According to media reports, South Korean chipmakers are closely monitoring developments, worrying that a supply interruption could affect the supply of key raw materials such as helium, diluent, ethanol, and isopropyl alcohol (IPA).

Helium plays a crucial role in the semiconductor industry. It is a rare inert resource known as “golden gas.” As a byproduct of liquefied natural gas (LNG) production, it relies heavily on Qatar, which accounts for about one-third of global supply.

Earlier, on March 18, the global largest LNG (liquefied natural gas) production base, Ras Laffan Industrial City in Qatar, was attacked. Helium usually needs to be extracted from LNG, so its supply was also impacted. According to statistics, the amount of helium demanded by the global semiconductor manufacturing industry accounts for more than 30% of total helium demand. Helium is essential as carrier gas, shielding gas, and purge gas for core processes such as chip lithography, etching, ion implantation, and vapor-phase deposition.

Image source: Zhuochuang Information

Industry insiders noted that in recent days, the spot price of helium has skyrocketed, and compared with the price at the end of February, the increase has exceeded 50%.

South Korea is the country most severely hit by this helium shortage. The two major powerhouses in the global memory chip market, Samsung Electronics and SK hynix, have urgently initiated inventory verification mechanisms. Their procurement departments check the supply status of key materials and price fluctuations every day to prevent production interruptions.

Semiconductor manufacturers including Samsung Electronics, SK hynix, and Dongbu Hi-Tech are prioritizing securing sufficient inventories at the current market prices. Their procurement departments check the supply status of key materials and price fluctuations every day to prevent production interruptions. Keeping supply stable has already surpassed cost considerations.

The market faces re-pricing

According to reports, even if peace talks succeed, the reconstruction of Ras Laffan Industrial City may still take years, so supply shortages and price fluctuations will become risks over the medium and long term.

As of now, helium still has no substitute in the semiconductor manufacturing process. According to MoneyDJ, although TSMC and United Microelectronics have achieved helium recovery rates of 60% to 75%, significantly reducing reliance on imports, about 25% of helium loss per day still needs to be replenished through imports, and the recovery system consumes a large amount of electricity. Also, according to data from the Korea International Trade Association, last year 64.7% of South Korea’s total helium imports came from Qatar.

Everbright Securities believes that as global geopolitical risks intensify, concerns about “cut-off supply” in segments with heavy technological dependence may be re-priced by the market. The investment logic for semiconductor materials has formed a “dual-engine drive.” In the short term, under accelerating supply-chain safety concerns, the willingness and urgency of downstream manufacturing plants to introduce domestic solutions will increase, especially for “chokepoint” segments. In the long term, capital-side deployments have been comprehensively accelerated, and dense industrial catalysts are expected to follow in succession. There is high certainty that domestic advanced process and advanced storage capacity expansions will proceed, which will open up growth space for upstream “shovel” stocks.

In China’s A-share market, electronic component stocks overall are performing well. Of 62 constituent stocks, 40 are up this year, and the median gain is 8.62%. Among them, Jin’an Guoji has the largest year-to-date increase, up 87.4%. Kingshow Co., Ltd., Tai Jing Technology, Nanya New Materials, and Zhongying Technology are among the top gainers, with all up about 60% year-to-date. In addition, Guanghe Technology, Swift Xing, Mingyang Circuits, Shangelian Electronics, and others are also up more than 30%.

（Source: Eastmoney Research Center）