By Adam Clark
Semiconductor makers are facing a supply crisis that threatens the production of chips used in autos, computers, and household goods.
A shortage of helium -- key for the chip-manufacturing process -- will force tech giants to pay up to maintain a supply of the crucial gas, and that could present an opportunity for investors.
Helium doesn't normally make headlines. However, fighting in the Middle East has knocked roughly a third of the world's supply offline. Whereas helium generally trades at around $500 per thousand cubic feet, spot prices have surged to around $1,000-$1,200 per thousand cubic feet.
Although efforts are ongoing to reopen the Strait of Hormuz to commercial traffic, that wouldn't mean the helium crunch would end any time soon.
"Even if the situation stabilizes soon, helium supply chains don't rebound quickly. It takes months to reposition containers and restart flows, and 6 -- 18 months for markets to rebalance. Full normalization takes years because new capacity and recycling don't scale overnight," says Nick Vyas, executive director of the Randall R. Kendrick Global Supply Chain Institute at the USC Marshall School of Business.
Who Buys Helium
Chip makers are the largest consumers of helium globally, using the gas to maintain stable temperatures while etching silicon wafers into advanced semiconductors.
South Korean chip makers SK Hynix and Samsung Electronics are particularly vulnerable to any supply disruption, having historically sourced the majority of their helium from Qatar, which had to declare a force majeure at its vital Ras Laffan facility following missile strikes. Another big consumer is Taiwan Semiconductor Manufacturing.
Shortages are not yet at levels that threaten to halt global chip production. Taiwanese chip manufacturer TSMC said in early March that it had six months' worth of helium inventory on hand and production would only be affected if the stoppage to supplies from Qatar lasted for more than three months, according to analysts at Jefferies. Samsung and SK Hynix also have four to six months' worth of supply, Reuters reported in late March.
SK Hynix declined to comment when contacted by Barron's. TSMC and Samsung didn't respond to requests for comment.
Because chip companies will pay almost anything to prevent a multimillion-dollar factory shutdown, distributors hold immense pricing power. Spot helium prices could spike by 50% -- 200% in severe shortage scenarios, while contract prices are typically more stable but could increase 20% -- 40% on renegotiation, according to analysts at Fitch Ratings.
Who Sells Helium
There is a chance for investors to benefit. Companies such as Air Products & Chemicals, Linde, and Air Liquide are set to gain from the price spike. Another beneficiary could be Exxon Mobil, which produces approximately 20% of the world's helium.
Helium is a byproduct from natural-gas processing and production is dominated by gas field owners in North America and the Middle East. From there it is taken on by industrial gas companies, which manage its refining, liquidation, and transport in cryogenic containers and it's generally sold under long-term contracts. Unlike crude oil, helium can't be easily redirected or left at sea for a prolonged period as the liquefied gas continuously boils off during transit.
The company with the biggest exposure to helium is Pennsylvania-based Air Products, which generated around 7% of its sales from the gas in its latest fiscal year, according to analysts at Mizuho. Although around 90% of its helium volumes are likely contracted that still leaves 10% of sales driven by soaring spot prices, which could give it an advantage over rivals struggling to source helium for their own contracts.
"We believe Air Products [has] sufficient storage and alternative supply to continue to meet their contract requirements, and perhaps gain share, " Mizuho's John Roberts wrote in a recent research note.
Roberts has an Outperform rating and $330 target price on Air Products stock. Shares trade around $303, having gained around 23% this year so far, giving the company a market value of about $66 billion.
J.P. Morgan's Jeffrey J. Zekauskas agrees, recently raising his rating on Air Products to Overweight from Neutral and lifting his target price to $310 from $280.
"We note that Air Products is the leading global producer of helium ISO-tanks by far through its Gardiner subsidiary. If there were any company that should benefit from a possible shortage of helium containers, it is Air Products," Zekauskas write.
It's a more mixed story for Air Products' two larger rivals, Air Liquide and Linde. They have smaller exposure to helium -- it represents around 4% of sales for Air Liquide and 2%-3% for Linde, according to UBS. Air Liquide has a market value of around $123 billion, while Nasdaq-listed Linde has a market cap of about $237 billion.
Additionally, Air Liquide and Linde are both big customers for Qatar's Ras Laffan facility and now have to turn to alternative sources of supply. Air Liquide's U.S. subsidiary Airgas declared a force majeure in March, telling one customer that it would only meet up to half of their normal monthly helium demand, according to The Wall Street Journal.
Who Produces Helium
Investors might be better off thinking American. Exxon Mobil produces around a fifth of the world's helium from its LaBarge facility in Wyoming.
"Exxon is a net beneficiary of the current helium market tightness, with upside to pricing and advantages in security of supply relative to certain industrial gas majors that rely on Qatar for production," wrote UBS analyst Manav Gupta in a research note.
Gupta estimates that every $100 increase per thousand cubic feet of helium translates to an additional $119 million in earnings before interest, taxes, depreciation and amortization for Exxon Mobil, if the volumes are sold on the spot market. He has a Buy rating and $171 target price on Exxon Mobil stock, which trades around $151. Of course, Exxon Mobil's $626 billion market value is primarily driven by its oil operations.
While investors might be wary of making trades based on the unpredictable situation in the Middle East, the helium shortage looks likely to last. Even if there's a permanent reopening of the Strait of Hormuz, domestic U.S. producers such as Air Products and Exxon Mobil are likely to benefit from the need for security of supply in an increasingly volatile market.
Write to Adam Clark at adam.clark@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
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April 29, 2026 20:00 ET (00:00 GMT)
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