Middle East Geopolitical Tensions Pose New Risks to Global Semiconductor Supply Chains
South Korean government officials have issued an alert that an expanded conflict involving the U.S., Israel, and Iran could send major shockwaves through the global semiconductor supply chain if hostilities disrupt the steady flow of critical industrial materials from the Middle East.
South Korea’s semiconductor sector, anchored by manufacturing giants Samsung Electronics and SK Hynix, accounts for roughly two-thirds of the world’s total memory chip output. If access to Middle Eastern chipmaking materials is interrupted, semiconductor production could slow sharply unless alternative sources can be secured at very short notice.
The Helium Problem
One high-risk material at the center of concerns is helium, an irreplaceable input for chip manufacturing. Fabs rely on helium to manage heat buildup, detect equipment leaks, and maintain consistent stable temperatures in production machinery, and for most of these core use cases, there is no viable commercial substitute available today.
Around 38 percent of the world’s total helium supply is produced in Qatar, where large-scale extraction operations are integrated directly into the country’s natural gas industry. This extreme geographic concentration of output means any disruption to Qatari production quickly ripples across the entire global supply network.
On March 4, Qatar’s state-owned energy firm QatarEnergy declared force majeure after halting all gas production and downstream operations in response to ongoing regional attacks. Downstream facilities process raw natural gas into a range of end products, including urea, polymers, methanol, and aluminum.
South Korea’s Industry Ministry confirms the country also depends on Middle Eastern suppliers for 14 other chipmaking inputs, including bromine and specialized chip-inspection equipment. While a small share of these materials can be sourced domestically or from other global markets, shifting suppliers in the semiconductor sector is notoriously difficult. Chipmakers must complete rigorous testing and validation of any new source to meet the industry’s extremely strict purity standards, a process that can take months to finalize.
Major chip firms note the situation remains manageable for the time being. As reported by Reuters, SK Hynix says it has built a diversified supply base and holds ample helium inventory, adding that there is “almost no chance” its operations will be disrupted in the near term.
Leading contract chipmaker TSMC echoed that assessment, stating it does not currently anticipate any significant operational impact from regional tensions. GlobalFoundries, another major contract manufacturer, shared it maintains direct communication with all key suppliers and has pre-built mitigation plans ready to activate if needed.
Stuck in Transit
Even if Qatar restarts full production quickly, the global semiconductor industry remains vulnerable to disruptions of key regional shipping routes. The vast majority of energy and petrochemical exports from the Persian Gulf pass through the Strait of Hormuz, one of the world’s most critical maritime choke points.
An extended interruption to shipping through this corridor would slow the movement of industrial gases and petrochemical inputs that chipmakers depend on. Ongoing disruptions to regional oil and gas exports have already pushed global energy prices higher: as of this writing, Brent crude, the European benchmark, trades at $80 per barrel.
Energy costs are one of the largest expenses for semiconductor manufacturing. Chip fabrication plants operate massive clean rooms that require constant electricity and cooling, leaving producers extremely sensitive to shifts in global energy prices. South Korean industry representatives warn a prolonged conflict would drive energy prices even higher, likely leading to higher semiconductor production costs and eventually higher end prices for chips.
These new risks emerge at a time when global semiconductor supply chains are already stretched thin by surging demand for AI computing. Robust chip demand from AI data center operators has already tightened supplies across multiple electronics sectors, including smartphones, laptops, and automobiles.
A Long-Term Problem
For now, the immediate impact on global chip production remains unclear. Most major chipmakers proactively maintain a mix of suppliers and stockpile specialty gases and chemicals to weather short-term disruptions.
But if regional instability drags on, supply chain pressure will almost certainly continue to build. A drawn-out conflict that damages energy infrastructure, export facilities, or shipping lanes could gradually squeeze the global supply of critical chipmaking materials.
This squeeze could also delay expansion plans by major technology companies building out artificial intelligence infrastructure in the Middle East. Firms including Amazon, Microsoft, and Nvidia have already positioned the United Arab Emirates as a key regional hub for AI computing capacity.
This story originally appeared on WIRED Middle East.
