Qatar produces about a third of the world's helium, a gas that is central to the semiconductor manufacturing process at a moment when chips have become increasingly crucial as the lifeblood behind AI
But the war with Iran has disrupted Qatari natural gas production and the helium that is extracted alongside it, while also bringing a key shipping corridor to a halt through the Strait of Hormuz.
"You've got two problems — you've got the problem that you're not getting output, and the second problem is that you're getting an interruption in the logistics and the shipping," said Simon Croom, a professor of supply chain management at the University of San Diego.
"That compounds because so many other products in the supply chain pass through the Middle East, whether it's the Strait of Hormuz or the Suez Canal," he added.
The conflict with Iran, which has now dragged on for more than three weeks, has proven particularly disruptive for energy markets.
Following the initial U.S.-Israeli strikes on Iran in late February, Tehran has responded by hitting targets throughout the Middle East, including gas and oil infrastructure.
It has also closed the Strait of Hormuz, the waterway that connects the Persian Gulf to the Indian Ocean and carries about a fifth of the world's oil.
This has sent oil prices surging to more than $100 a barrel at times. But while much attention has focused on reverberations through the oil and gas markets, the same factors are also disrupting the supply of helium.
Helium is extracted alongside natural gas. Iranian strikes have targeted Qatari natural gas plants, with Reuters reporting that the country's helium exports are poised to fall 14 percent following a recent series of attacks.
It also faces a bottleneck in the Strait of Hormuz, which has been effectively closed since early March, when Iran vowed to attack any vessels that attempted to travel through the corridor.
Helium is a "critical input" for semiconductor manufacturing, the Semiconductor Industry Association noted in a 2023 response to the U.S. Geological Survey about helium supply risk.
"Helium's unique properties as an inert gas and a high thermal conductor make it ideal for use in functions that require preventing unwanted chemical reactions and ensuring control and precision of wafer temperatures," it wrote at the time.
The gas can be used to help cool wafers during processes such as etching and deposition, in addition to cooling lithography light sources, explained Hanna Dohmen, a senior research analyst at Georgetown's Center for Security and Emerging Technology.
Etching, deposition and photolithography are all various steps in the process of creating the intricate patterns that turn the wafers into chips. Helium can also be used for other purposes, such as detecting leaks.
Check out the full report at TheHill.com.
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