The escalating conflict involving the United States, Israel, and Iran could disrupt the supply of critical materials used in semiconductor manufacturing, Kim Young-bae, a South Korean ruling party lawmaker, warned on Thursday as fighting in the Middle East entered its sixth day.
Kim Young-bae said concerns were raised during a meeting with executives from major technology companies and industry groups, including Samsung Electronics, about the potential impact on global chip production.
According to Kim, industry officials warned that semiconductor manufacturing could face disruptions if key materials sourced from the Middle East become difficult to obtain.
‘Officials raised the possibility that semiconductor production could be disrupted if some of these key materials cannot be sourced from the Middle East,’ he said during a briefing with reporters, citing helium as one example.
Helium plays a crucial role in semiconductor production, particularly in managing heat during manufacturing processes. The gas currently has no viable alternative and is produced in only a limited number of countries, with Qatar among the major suppliers.
‘Beyond immediate supply concerns, the conflict could also affect long-term technology investments’
The warning comes at a time when the global semiconductor industry is already struggling with supply bottlenecks driven by surging demand for chips used in artificial intelligence data centres. That demand has tightened supply for a range of industries, including gaming, smartphones, laptops, and automobiles.
South Korean memory chip producer SK Hynix said in a statement that it has secured diversified supply chains and maintains sufficient helium inventory, meaning the company expects minimal impact from potential disruptions. Meanwhile, Taiwan’s leading chipmaker TSMC said it does not currently anticipate any significant impact but will continue monitoring developments closely.
South Korea’s industry ministry noted that the country depends heavily on the Middle East for at least 14 other items used in semiconductor supply chains, including bromine and chip inspection equipment. However, officials said many of these components could potentially be sourced domestically or from alternative markets.
Beyond immediate supply concerns, the conflict could also affect long-term technology investments in the region. According to Kim, the crisis may slow plans by major technology companies to develop artificial intelligence data centres in the Middle East, which could ultimately affect demand for advanced chips.
Earlier this week, Amazon reported that some of its data centres in the United Arab Emirates and Bahrain were damaged by drone strikes, raising questions about the pace of expansion by major technology firms in the region.
Several US technology giants, including Microsoft and Nvidia, have been positioning the UAE as a regional hub for artificial intelligence computing needed to power services such as ChatGPT.
Related articles:
