Middle East Conflict Threatens Chip Supply Chains as Helium Production Goes Offline
The Middle East conflict is creating new vulnerabilities in the semiconductor supply chain, with Qatar's helium production offline and bromine shipments from Israel at risk, threatening chip manufacturing at a time of unprecedented AI-driven demand. Qatar's helium plant at Ras Laffan, responsibl...
The Middle East conflict is creating new vulnerabilities in the semiconductor supply chain, with Qatar's helium production offline and bromine shipments from Israel at risk, threatening chip manufacturing at a time of unprecedented AI-driven demand.
Qatar's helium plant at Ras Laffan, responsible for roughly one-third of global helium production, has been offline since early March 2026 after Iranian drone strikes forced the facility to shut down. The plant produced nearly 63 million cubic meters of helium in 2025, accounting for 33 percent of the roughly 190 million cubic meters produced globally.
Helium is essential for semiconductor manufacturing with no viable substitute. It cools silicon wafers during fabrication, maintains stable temperatures in fabrication equipment, is used for leak detection, and is essential in the photolithography process.
According to Kornbluth Helium Consulting, the world is looking at a minimum two-to-three-month shutdown of helium production and a four-to-six-month period before the supply chain returns to normal. Helium spot prices have doubled.
The crisis is particularly acute for South Korea's Samsung and SK Hynix, which together control 70 percent of the DRAM market and 80 percent of the high-bandwidth memory (HBM) market critical for AI chips. In 2025, South Korea imported 64.7 percent of its helium from Qatar. SK Hynix says it has diversified its supply and secured sufficient inventory, though the industry is on a roughly two-week clock depending on how long the outage continues.
Bromine presents another supply risk. Approximately two-thirds of the world's bromine comes from Israel and Jordan, and South Korea sources 90 percent of its bromine from Israel. The element is used in circuit formation and chip inspection equipment.
Beyond materials, energy costs are surging. AI data centers consume roughly three to five times as much electricity as conventional data centers, meaning rising oil prices could significantly hike operating costs and threaten the rollout of AI infrastructure worldwide. Amazon's data centers in the UAE have already been hit by Iranian drones.
For now, the impact appears limited, according to Ray Wang, memory analyst at SemiAnalysis. But a prolonged regional conflict could potentially disrupt chipmakers' manufacturing operations regarding sourcing materials like helium and bromine.
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