Helium supply shock threatens Asian chipmakers as economic slowdown fears mount

Samsung Electronics’ products displayed at an exhibition hall for the Apec summit in Gyeongju, South Korea in October.

Photo: AP The Iran war is rattling Asian chipmakers as damage to Qatar’s gas facilities chokes off supplies of helium, an essential ingredient in manufacturing products ranging from smartphones to medical scanners.

Analysts warn that the supply disruption is expected to trigger ripple effects across the global economy for some time.

Pradeep Philip, head of Deloitte Access Economics, said that while there had been considerable focus on the energy shock arising from the conflict, the crisis over helium production was also posing financial and industrial risks.

Qatar accounts for a third of the global supply of helium.

Iranian attacks on Qatar’s Ras Laffan industrial complex have damaged its liquefied natural gas (LNG) facilities and reduced its LNG export capacity by about 17 per cent, with recovery expected to take three to five years.

Helium is one of the main components of the evaporation gas produced in LNG storage tanks.

It is used to prevent contamination and cool components during semiconductor manufacturing.

South Korea and Taiwan account for about a fifth of global semiconductor capacity and source most of their helium from Qatar.

Prolonged shortages could force temporary shutdowns, with a potential knock-on impact on the electronics, automotive and medical diagnostic sectors, according to business analysts.

Liquefied natural gas facilities in Ras Laffan Industrial City, Qatar.

Iranian missile attacks on the facilities have caused significant damage to the natural gas industrial complex.

Photo: EPA “We are already starting to see the impact because supply is stopped,” said Will Symons, head of Deloitte Asia-Pacific’s sustainability practice, adding that businesses could cope for now due to their strong inventories.

With few signs that the war could end any time soon, concerns about the impact of a prolonged conflict on economies would go far beyond an energy shock caused by fewer oil and gas supplies moving through the Strait of Hormuz, he said.

Symons said helium was hard to substitute as it was vital in the production of many products. “The longer the supply disruption continues, and as the conflict expands, the risk of the impact increases,” he added.

South Korea, home to some of the world’s largest chipmakers, including Samsung Electronics and SK Hynix, has enough helium inventories to last until June, according t

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