【Iran Crisis】Helium Is Far More Than Party Balloons: Qatar Gas Field Attacked, Annual Helium Production Down 14%, May Threaten Chip Production

The ongoing geopolitical tensions in the Middle East continue, with Iran attacking Qatar’s Ras Laffan critical natural gas export facility, which will impact global helium supply, affecting high-tech industries such as chip manufacturing and aerospace. The helium produced as a byproduct of natural gas at this facility is an essential material for advanced industries like chip production.

Qatar Helium Production Down 14%, Combined with Storage Bottleneck, Spot Prices Doubling

Helium is a byproduct of natural gas production, separated through cryogenic distillation. According to the U.S. Geological Survey, Qatar has the world’s largest single natural gas field, accounting for about 30% of global helium supply. After the attack on Ras Laffan, Qatar Petroleum stated that the gas field was severely damaged, with repairs expected to take years, leading to a 14% annual reduction in helium output.

Due to helium’s unique physical properties, its storage and transportation are extremely complex. Helium molecules are very small and can leak through tiny cracks. Liquid helium must be stored in specialized insulated containers, which can only hold it for 35 to 48 days before it vaporizes and escapes. Currently, about 200 such expensive containers are stranded in the Middle East, with very limited backup supplies worldwide.

Phil Kornbluth, president of Kornbluth Helium Consulting, noted that since the crisis erupted, spot helium prices have doubled and may continue to rise.

Helium Shortage Threatens Chip Production, Samsung and SK Hynix Rely on Qatar as a Weak Point

Helium is far more than just for party balloons. In semiconductor manufacturing, it is used to cool wafers, maintaining constant temperatures during etching processes. Jong-hwan Lee of Kyungmyeong University in Korea stated that, in current semiconductor manufacturing processes, there are no viable alternatives to helium for cooling wafers.

According to data from the Korea International Trade Association, by 2025, 64.7% of Korea’s helium imports will come from Qatar. Fitch Ratings reported that South Korea, home to the world’s largest memory chip manufacturers Samsung Electronics and SK Hynix, is vulnerable to supply shortages.

The Korea Semiconductor Industry Association said that short-term supply is currently sufficient, and companies are expanding supply channels. TSMC, a major chip manufacturer, responded that “we do not expect any significant impact at this time,” but will continue to monitor the situation closely.

Additionally, the medical industry relies on helium to cool superconducting magnets in MRI machines, and the aerospace industry uses helium to purge rocket fuel tanks. With more frequent launches by companies like SpaceX and Blue Origin, demand for helium in aerospace is expected to increase.

Industry: Critical Industries Prioritized, Chipmakers Will Pay Premium for Supply

Kornbluth stated that the full impact of the helium shortage has not yet fully manifested, as helium containers loaded during the conflict take several weeks to reach Asia. Currently, contract prices “still have the potential to rise significantly.”

However, he added that if shortages occur, industries will prioritize supply based on importance, with critical sectors like chip manufacturing and healthcare receiving priority. Since helium accounts for a small proportion of total semiconductor production costs, chip manufacturers are likely willing to pay higher prices to secure supply.