The Impact of the US-Iran War on Technology's Supply Chains

The ongoing US-Iran War has captured global attention for its disruption of oil and gas markets.

Yet, beneath the surface, a quieter crisis is sending shockwaves through the technology supply chain.

A critical shortage of helium – a vital element in the production of advanced semiconductors that power today’s hyperscale data centres – is emerging as a major threat to the sector’s stability.

This shortage risks halting the industry’s exponential growth at a pivotal moment for global infrastructure expansion.

If helium reserves continue to dwindle, the world’s semiconductor foundries could face production standstills, triggering a cascade of chip shortages.

The result: significant strain on data centre operators racing to scale compute capacity in an era defined by AI, cloud, and digital acceleration.

What is happening in the Middle East?

Since the conflict began on 28 February, the geopolitical shockwaves have severely disrupted global supply lines.

Qatar is a critical producer of helium, supplying roughly one‑third of global output – about 63 million cubic metres in 2025. 

Following drone strikes tied to Operation Epic Fury, QatarEnergy was forced to shut down its Ras Laffan facility, the world’s largest LNG export plant.

Because industrial helium is extracted as a byproduct of liquefied natural gas (LNG) processing, the suspension of LNG operations has effectively frozen helium output.

This disruption has removed approximately 5.2 million cubic metres of helium from the market each month, tightening an already strained supply chain that underpins advanced manufacturing and data centre infrastructure.

Furthermore, with Iran blocking ships from leaving the Persian Gulf through the Strait of Hormuz, alternative maritime routes have been sharply curtailed, effectively pushing a massive portion of global helium supplies offline. 

Why helium is critical to the tech industry

Semiconductor chips are the bedrock of the data centre industry, powering servers, storage systems, and networking equipment that underpin AI, cloud and hyperscale workloads.

To manufacture these advanced chips, ultra‑pure helium is absolutely essential, serving as a key enabler of the ultraclean and ultracold environments required throughout fabrication.

The gas is used for wafer cooling during the photolithography process and for leak detection in complex sub‑5‑nanometre chip manufacturing, where even microscopic contamination can scrap entire batches.

Helium’s unique physical properties – including the lowest freezing point of any element – make it functionally irreplaceable in these precision‑driven, high‑yield applications.

Phil Kornbluth, President of New Jersey-based Kornbluth Helium Consulting, highlights the stark reality of the situation.

"Helium is expensive relative to other gases, so, for the most part, where there are substitutes for helium, helium is no longer used," Phil says.

Without access to semiconductor‑grade helium, the fabrication of logic and memory chips will slow dramatically or grind to a complete halt, starving data centres of the core hardware they need to run existing workloads and scale new compute capacity.

Ripple effects across the broader supply chain

The data centre hardware supply chain is heavily concentrated in Asia, a region now facing rising tail risks from this helium tightness.

Leading chipmakers based in Taiwan and South Korea are deeply dependent on Qatari exports, with South Korea sourcing nearly 65% of its helium imports from Qatar last year. 

This concentration leaves the region’s semiconductor‑driven data centre ecosystem highly exposed to any prolonged disruption in Middle Eastern supply.

Unlike oil, helium is notoriously difficult to stockpile.

Because its molecules are so small, the gas can seep through even the most sophisticated containment and storage systems.

As a result, the global supply chain effectively runs on a slim buffer of around 45 days of liquid inventory before existing reserves boil off and must be replenished.

Prices have already doubled since the war began, reflecting both physical scarcity and jittery forward‑buying.

Industry analysts warn that if disruptions stretch to between 60 and 90 days, prices could spike by another 50%, potentially pushing the marker above US$2,000 per thousand cubic feet and adding severe cost pressure to semiconductor fabs and data centre hardware suppliers.

While the US and Algeria have some buffer capacity, replacing Qatar’s vast output in the short term is virtually impossible, leaving the global data centre supply chain exposed to prolonged delays and rapidly escalating procurement costs.

With no ready alternative source for semiconductor‑grade helium, even partial shortages threaten to ripple through chip fabs, server OEMs and hyperscale operators alike.

The threat to artificial intelligence and technology

The data centre sector – and wider tech ecosystem – is undergoing a massive transformation driven by AI, with the AI boom demanding vast quantities of high‑bandwidth memory and advanced compute chips.

Taiwan Semiconductor Manufacturing Company (TSMC) produces about 90% of the world’s most advanced logic chips and serves as the sole supplier for major AI accelerators.

Any disruption to TSMC’s helium supply directly threatens roughly US$650 billion in planned AI investments globally, putting the AI‑infrastructure pipeline at risk.

Beyond raw materials, the war is also inflating energy prices at a particularly sensitive moment.

AI‑driven data centres can consume up to five times as much electricity as conventional facilities, making them especially vulnerable to rising costs.

Surging oil prices feed into power‑generation expenses, which in turn raises the total cost of ownership for hyperscale operators and could slow the rollout of AI infrastructure worldwide.

Shawn Kim, Head of Asia Technology Research at Morgan Stanley, says these compounding factors will have a significant impact.

"A disruption in the Strait of Hormuz wouldn’t automatically halt chip production, but it could ripple through power costs, materials supply, and the economics of building AI infrastructure," Shawn tells Bloomberg.

Implications for the manufacturing sector

For semiconductor manufacturers, the immediate focus is on mitigation and survival.

Large fabs operate massive cleanrooms that demand uninterrupted electricity and precision cooling, making them uniquely exposed to both the helium shortfall and the wider energy crisis.

Any disruption to these tightly controlled environments can halt production lines, scrap wafers and delay shipments of the advanced chips that underpin data centre and AI infrastructure worldwide.

If constrained helium flows persist and exhaust existing inventory buffers, manufacturers will face tighter allocations and sharply higher working‑capital demands.

In severe scenarios, this could push chipmakers to prioritise high‑margin AI chips over lower‑margin components, deepening shortages across the broader electronics market and tightening supply for data centre–adjacent hardware.

Leading‑edge manufacturers are trying to offset these risks through advanced recycling systems, with top fabs already recapturing a large share of their helium.

However, industrial recycling is still in its early stages, and there is little headroom to meaningfully improve efficiency beyond current levels.

Ultimately, the duration of the conflict will determine the trajectory of semiconductor manufacturing and the data centres that depend on it.

Even if facilities restart immediately, the lag in shipping schedules, contract reallocations, and rationed supply means the impact of this helium shortage will ripple through the technology sector for months ahead.