Middle East conflict threatens global chip supplies and AI expansion
Mar 6th 2026
Officials warn that a US Israel conflict with Iran could disrupt flows of helium and other chipmaking materials from the Middle East, risking higher production costs and slower rollouts of AI infrastructure unless alternative supplies are found.
- South Korea produces about two thirds of the world’s memory chips.
- Helium is essential in chip manufacturing and has few viable substitutes.
- Qatar supplies about 38 percent of global helium and QatarEnergy declared force majeure on March 4 after suspending gas operations.
- South Korea also relies on the Middle East for 14 other chip materials including bromine and some inspection equipment.
- Major chipmakers say they currently have inventories and diversified suppliers that limit near term disruption.
- Disruption of shipping through the Strait of Hormuz or higher energy prices could raise production costs and slow chip output, increasing pressure on AI expansion.