MW Chip makers face a looming shortage of a key ingredient if the Iran conflict drags on
By William Gavin
Qatar accounts for a third of global helium supply but has halted production of the gas, which is essential for semiconductor manufacturing
Helium is a crucial component for semiconductor manufacturing and there are no available substitutes, according to the Semiconductor Industry Association.
As if there weren't enough supply constraints in the semiconductor industry, chip makers are staring down a potential shortage of helium - a gas crucial for semiconductor manufacturing.
Conflict in the Middle East between the U.S., Israel and Iran threatens to hurt both the production and transportation of helium. But whether the chip industry is dealing with a minor hiccup or a big problem is still up in the air.
Helium is extracted as a byproduct of natural-gas processing and is an essential part of the semiconductor-manufacturing process. Chip makers use it as a carrier gas to entrap and transport certain chemicals, transfer energy to chemical reactants and cool silicon wafers during production.
According to the Semiconductor Industry Association, there are no available substitutes that can replace helium for some of the industry's uses.
"Should the supply of helium be immediately disrupted, there would likely be shocks to the global semiconductor manufacturing industry," the SIA warned in a 2023 report.
On March 2, QatarEnergy stopped production at its Ras Laffan complex, which it says is the largest export facility in the world for liquefied natural gas. It later declared "force majeure," which frees it from meeting its obligations to customers.
Qatar produced roughly 63 million cubic meters of helium in 2025, about a third of the 190 million cubic meters produced overall, according to the U.S. Geological Survey. It was second only to the U.S., which produced 81 million cubic meters of helium last year.
"Nobody has the kind of capacity to recover from the loss of a third of the supply of helium on the planet," Garrison Ventures CEO Rich Brook - whose consulting firm focuses on the helium industry - said in a March 4 Gasworld webinar.
Kim Young-bae, a lawmaker with South Korea's ruling Democratic Party, said recently that the conflict could disrupt supplies of helium and other materials for companies like SK Hynix (KR:000660) and Samsung Electronics (KR:005930), whose memory components are increasingly important to artificial-intelligence chip makers.
South Korea's semiconductor exports rose 22.2% to $173.4 billion in 2025, according to the country's Ministry of Trade, Industry and Resources. The country also relied on Qatar for about 65% of its imported helium last year, according to the Korea Customs Service.
That said, the risk to chip makers is likely not immediate, since it can take weeks to transport helium from port to port for suppliers. Meanwhile, chip makers have some supply in reserve. While helium shipments may be delayed by the worries in the Strait of Hormuz, many wouldn't have been expected to reach manufacturers yet anyway, helium-industry consultant Phil Kornbluth told MarketWatch.
More than 10,000 merchant mariners and hundreds of ships are trapped in the Persian Gulf, FreightWaves reported on Wednesday, citing shipping executives. That includes 10 Maersk (DK:MAERSK.B) ships, its CEO has said.
Read: 11 stocks to harden your portfolio against Iran risk
There are alternative means to ship out helium. Kornbluth said companies could try moving containers to other ports, such as Oman's Salalah or Saudi Arabia's Jeddah, to ship to buyers.
Global ports ?operator DP World said Thursday its Red Sea ports, including Jeddah and Sokhna in Egypt, are likely to see more traffic as a result of the conflict with Iran. An executive said on a call with analysts that shipments are still being moved to ports on the eastern side of the Strait of Hormuz.
SK Hynix has said it keeps several months' worth of inventory for materials used in production, according to Bernstein analysts. Chip makers can also recycle some of the helium they use, which Samsung has started doing, according to The Korea Times.
Bernstein analysts said both companies have signaled they expect no disruption, since the firms began diversifying their supply after the Russia-Ukraine war began, as well as in response to some friction between South Korea and Japan. Taiwan Semiconductor Manufacturing Co. (TW:2330) also expects little disruption, according to Bernstein.
The analysts concluded that there's "little or no risk to our semiconductor coverage from [potential] helium shortages at this time."
Representatives for SK Hynix, Samsung Electronics and TSMC did not immediately return a MarketWatch request for comment.
But circumstances could change as the conflict between the U.S. and Iran continues. While major chip makers have some helium supply in reserve, there's some uncertainty about what would transpire if the conflict were to drag on and disrupt helium production over a longer span.
Read: Micron and other memory stocks see outsized losses. What's behind the big moves?
If supply does tighten, suppliers will likely prioritize key sectors when allocating their volumes. That would probably mean more helium for makers of MRI machines, semiconductors and rockets, and less for party balloons and welding, Kornbluth said.
"If peace broke out today, helium wouldn't restart for probably five weeks," Kornbluth said, adding that the "best scenario" is likely a three-month outage, including the time it takes to restart production. It would then take a few more months to normalize the supply chain.
President Donald Trump and administration officials have repeated several predictions for when the fighting will end, ranging from as long as four or five weeks to "very soon."
On Thursday, Iranian Supreme Leader Mojtaba Khamenei said that Iran will continue targeting U.S. bases in the Middle East and that the Strait of Hormuz must remain closed. At least six vessels have been attacked by Iran over the past few days, according to reports. Oman's Port of Salalah was also struck by drones this week.
Saad al-Kaabi, Qatar's energy minister, told The Financial Times on March 6 that the conflict could force Persian Gulf nations to halt energy shipments within a matter of weeks. Even if the conflict ended immediately, he said, it would take "weeks to months" for deliveries to return to normal.
See: Why a 1980s conflict may be the best market analog for the current Iran situation
-William Gavin
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March 13, 2026 09:40 ET (13:40 GMT)
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