South Korean officials have warned that the US-Israel war with Iran could hit the global semiconductor supply chain if it disrupts the flow of critical industrial materials from the Middle East.
South Korea’s semiconductor sector, led by giants like Samsung Electronics and SK Hynix, produces about two-thirds of the world’s memory chips. If the Middle East's supply of chipmaking materials is disrupted, semiconductor production could slow unless alternative sources are found quickly.
The Helium Problem
One material at risk is helium, which is essential in chip manufacturing for managing heat, detecting leaks, and maintaining stable temperatures in fabrication equipment. For many of these uses, there is no real substitute.
About 38 percent of the world’s helium is produced by Qatar, where large extraction facilities are tied to the natural gas industry. This concentration means that disruptions can quickly ripple through the global supply chain.
National oil company QatarEnergy declared force majeure on March 4, after stopping its gas production and downstream operations due to ongoing attacks. Downstream facilities turn gas into other products, including urea, polymers, methanol, and aluminum.
South Korea’s Industry Ministry said the country also depends on the Middle East for 14 other materials in chipmaking, such as bromine and some chip-inspection equipment. While some of these materials can be sourced domestically or from other markets, shifting suppliers in the semiconductor sector is difficult because chipmakers need to test and validate new sources to meet strict purity standards.
Companies say the situation is manageable for now. As reported by Reuters, SK Hynix said it has secured diverse supply chains and maintains sufficient helium inventories, adding that there is “almost no chance” its operations would be affected in the near term.
Contract chipmaker TSMC similarly said it does not currently anticipate a significant impact, while GlobalFoundries stated it is in direct contact with suppliers and has mitigation plans in place.
Stuck in Transit
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