Chip sector has enough helium, for now
Chipmakers remain resilient despite growing supply chain vulnerabilities
The ongoing US-Israel war with Iran is choking off global helium supply—a critical gas for chip manufacturing and other industries. However, we do not expect this to pose an immediate threat to semiconductor production, and the AI investment boom should remain intact.
Helium is a byproduct of LNG and therefore relies heavily on Qatar, which accounts for roughly a third of global supply. Attacks on Qatar’s LNG infrastructure are rippling through the helium supply chain given its importance in chipmaking, and some fear that the fallout could derail the AI investment boom.
However, we do not think that semiconductor production will be severely disrupted. Although Qatar is a big supplier, there are alternative sources, and chipmakers can easily outbid other industries, especially for high-end use. Reserves and recycling technology also mean the top chipmakers are well positioned to weather the storm.
If the war drags on, supply chain stress will only intensify. A wide range of commodities are at risk, and the chipmakers will need to make sure that no vulnerabilities go unchecked, as single missing input could grind the entire production line to a halt.
