A war in the Middle East could pose a threat to the semiconductor industry and other sectors that rely on helium, a resource produced in the Gulf.
Helium is a little-known but important input in many industries, especially technology. Semiconductor manufacturing uses its cooling properties to transfer heat. Helium is also essential to photolithography, a technique used to print the intricate circuitry on each chip.
The U.S. Geological Survey estimates that before the war, Qatar produced more than a third of the world’s helium supply. But recently, Qatar Energy’s Ras Laffan Industrial City, the world’s largest liquefied natural gas export facility that produces helium as a by-product, was shut down after an Iranian drone attack early in the war. On Wednesday, Iranian missiles destroyed the factory.
The global helium shortage will have ripple effects across various industries.
A report released earlier this week by UBS Global Wealth Management’s Chief Investment Office said: “Qatar produces around 30% of the world’s helium – a key raw material for semiconductors, industrial manufacturing and medical imaging – but some key raw materials for fertilizer production also pass through the strait.” “Prolonged disruption will not only affect energy prices, but also food prices and industrial production.”
known choke points
Helium supplies always involve risks. The Semiconductor Industry Association has warned that if helium supplies are disrupted in 2023, “there will likely be a shock to the global semiconductor manufacturing industry.”
“Prolonged regional conflicts could disrupt chipmakers’ manufacturing operations when it comes to sourcing materials such as helium and bromine,” Lei Wang, a computer memory analyst at Semianalysis, told CNBC today. “For now, the impact appears to be limited. However, a prolonged conflict could ultimately lead to disruption and the need to make adjustments to the procurement of key materials.”
South Korea and Taiwan, the world’s two largest semiconductor manufacturers, are particularly vulnerable to Middle East helium supplies.
In 2025, South Korean manufacturers purchased 55% of their helium from members of the Gulf Cooperation Council, a coalition of six Arab countries. Taiwan has purchased 69% of its helium from the GCC in 2024, according to a report released by Barclays analysts on Wednesday.
The de facto closure of the Strait of Hormuz has limited supplies and caused helium prices to soar. Bank of America estimated in a note last week that helium spot prices have soared by as much as 40% in some markets. On Monday, Phil Kornbluth, president of Kornbluth Helium Consulting, told CNBC that prices had in some cases increased by 70% to 100% in just over a week.
Oil tankers and cargo ships line up in the Strait of Hormuz, as seen from Khor Fakkan, United Arab Emirates, Wednesday, March 11, 2026.
Altaf Qadri | AP
Semiconductors are at the “top of the hierarchy”
When helium supplies become scarce, allocation is determined by how critical the need for the gas is.
“Demand for helium is concentrated in high-value, mission-critical applications such as semiconductors, aerospace, electronics manufacturing, and medical imaging,” Bank of America analysts said. “In these end markets, security of supply typically takes precedence over price, especially during times of stress. This dynamic has historically allowed suppliers to raise prices as customers seek to secure long-term supply during times of disruption.”
Kornbluth said semiconductors, considered a critical industry, are at the “top of the pecking order.” Less important industries (think party balloons) may receive lower allocations or no allocation at all.
Still, Kornbluth said even the semiconductor industry won’t be able to completely avoid the effects of a helium shortage.
“Everyone will feel it to some extent during the transition period,” he said, adding that even buyers at the front of the line will experience price increases. “The industrial gas industry is not going to be much of a favorite there. So they’re going to do their best to keep everyone supplied, or as well-supplied as possible, but that comes at a cost.”
length of war
Kornbluth said about 27% of the world’s helium could be taken out of use if the Strait were closed, and any shortage would have a delayed impact.
The consultant, who has been in the industry for more than 40 years, said, “Spot prices make up a very small percentage of helium sales because they are mostly long-term contract business, so even if they get good headlines, they don’t have that much of an impact on the market.” “The contract price hasn’t really moved yet.”
However, the situation could quickly change if prolonged shortages pressure suppliers to declare force majeure against contract customers.
Perhaps the only saving grace is that the helium market “has been in oversupply for the last two years of this shortage,” Kornbluth said. Still, it will likely be at least five weeks before production resumes after the ceasefire.
Past oversupply acts as insurance against current shortages. As a result, the chance of a supply shortage today is probably closer to 15%, rather than 30%, Kornbluth said.
If hostilities were to end “very quickly, with a cease-fire in place within a few weeks, and (this) turns out to be a four-month disruption, I would call it a significant stagnation within a period of abundant oversupply,” Kornbluth said. “When we have had shortages in the past, we have generally been profitable during those periods as the impact of higher prices across our customer base offsets the loss in sales volume due to the loss of supply from Qatar. So this is usually a positive event for the industry.”
producers are insulated
Analysts at Bank of America struck a similar note in a note, writing that while the unrest in Qatar could tighten the helium market, the length of the conflict and subsequent recovery will be key. Due to procurement diversification and on-hand reserves, major industrial gas producers are relatively well protected from direct supply disruptions, the bank said.
“Helium typically accounts for a low to mid-single digit percentage of gas companies’ revenues, and assuming the power outage in Qatar lasts for several weeks, we believe it would be a neutral to moderate net positive to earnings. The longer the outage is, the more the upside to earnings would be,” Bank of America wrote. “Although it will take time for the Qatari LNG facilities that are finally restarted to normalize operations, we think helium inflation will ease soon.”
Other Wall Street banks, including Deutsche Bank, Wells Fargo and JPMorgan, have all recently pointed to the tight helium market as a boon for industrial gas suppliers. Linde. Last week, JPMorgan analyst Jeffrey Zekauskas upgraded Linde to 15% higher in 2026 through Wednesday, compared to a 3% decline in the S&P 500 index.
Air products and chemicalsanother major gas producer, has risen 14% this year. Wells Fargo analyst Michael Sisson upgraded the stock to overweight last week, saying the Allentown, Pennsylvania-based manufacturer stands to benefit from rising helium prices.
—CNBC’s Arjun Kharpal and Dylan Butts contributed to this report.
