A Dual Crisis Threatening Global Semiconductor Supply Chains

The COVID-19 pandemic exposed the complex and fragile nature of global semiconductor supply chains, prompting major powers to reassess their technology development strategies and bringing the issue of technological and supply chain sovereignty back to the forefront.

Amid a broad global push to restructure supply chains, the Iran war has raised new concerns about the emergence of an additional crisis. The conflict is gradually contributing to a shortage of a critical element underpinning semiconductor manufacturing: helium. This comes alongside an already ongoing shortage of memory chips, driven by surging demand from AI data centers. While each factor individually represents a cause for concern, their convergence could lead to serious repercussions for semiconductor and broader technology supply chains in the near future, underscoring the urgent need to strengthen and diversify these systems.

The Iran War and Its Impact on Helium Supply

Semiconductor manufacturing processes rely heavily on helium, particularly during the etching stage, making the industry the largest global consumer of this gas. However, helium is primarily obtained as a byproduct of liquefied natural gas (LNG) production.

Qatar is a major global supplier, providing approximately 34% of global helium supply through three facilities, two of which depend on LNG byproducts. However, the closure of the Strait of Hormuz, coupled with repeated Iranian attacks on QatarEnergy’s Ras Laffan Industrial City—the world’s largest LNG export facility—has effectively disrupted production and shipping, posing a significant risk to future helium supplies.

Despite the sharp increase in spot prices, the immediate impact remains limited due to the industry’s reliance on long-term contracts, as well as previous oversupply that cushions short-term shocks. However, a prolonged shortage may compel suppliers to declare force majeure to their customers, raising particular concerns for major semiconductor manufacturers, especially in Taiwan and South Korea, which rely heavily on supplies from Gulf Cooperation Council (GCC) countries.

The Memory Chip Crisis

Memory chips represent one of the most critical components of semiconductors and serve as a cornerstone of modern digital electronics. However, the prevailing supply chain model, developed over decades, has led to the concentration of production among three major companies: South Korea’s Samsung Electronics and SK Hynix, and the U.S.-based Micron Technology. Together, these firms account for more than 90% of the dynamic random-access memory (DRAM) market.

With rapidly accelerating demand for high-bandwidth memory (HBM), driven by AI data centers, manufacturers have gradually shifted production toward this advanced category. However, the complexity of HBM manufacturing results in lower yields compared to DRAM, reducing production capacity and efficiency for traditional memory chips.

This shift has created a bottleneck in the supply of memory chips used in consumer electronics such as smartphones and personal computers, leading to declining inventories and significant price increases over the past year.

Moreover, this shortage poses broader macroeconomic risks, as it threatens to disrupt billions of dollars in digital infrastructure investments by AI hyperscalers. Although both Samsung and SK Hynix have committed to expanding production capacity, projections suggest that the shortage may persist until at least 2027.

Compounding Disruptions

While each of these factors is concerning on its own, their convergence could have severe implications for technology supply chains and national economies. Early signs of such impacts are already evident in South Korea, where the stock market fell by more than 12% on March 4, 2026—its worst decline on record.

South Korea’s industrial sector, including semiconductor manufacturing, is heavily dependent on fossil fuels, with over 70% of its crude oil imported from the Middle East via the Strait of Hormuz. Given that Samsung and SK Hynix together control approximately 80% of the HBM market and 70% of the DRAM market, disruptions could trigger cascading effects across the global economy.

These risks are further amplified by increasing investments in AI and the steady rise in demand for consumer electronics. An anticipated helium shortage in the coming months could exacerbate the situation, leading to an even more severe global memory chip supply crunch.

Rethinking the Architecture of Technology Supply Chains

The supply disruptions triggered by the COVID-19 pandemic prompted a global push toward diversifying semiconductor supply chains. However, these efforts come after decades of deep economic interdependence shaped by globalization, meaning that tangible outcomes will take time to materialize.

During this transitional phase, the industry remains ill-prepared to absorb shocks—whether stemming from rapidly increasing demand driven by technological innovation or from regional conflicts disrupting critical trade routes.

Although these developments pose short-term challenges to the global economy, they highlight the strategic importance of supply chain diversification initiatives. They also underscore the growing role of emerging manufacturing hubs such as India, which has recently launched its first Assembly, Test, Marking, and Packaging (ATMP) facility in partnership with Micron.

As the global semiconductor ecosystem evolves, these new entrants are expected to play a crucial role in stabilizing markets and mitigating future disruptions. Meanwhile, the industry continues to grapple with the legacy of a profit-driven offshoring model—one whose shortcomings should serve as an important lesson in designing the technology supply chains of the future.