Since the war in Iran began on February 28, headlines have focused on oil and gas. Another less visible but critical supply risk has emerged: a shortage of helium, a key input for semiconductor manufacturing. A prolonged helium shortfall could slow production of advanced chips, disrupt electronics manufacturers and force companies to delay or scale back datacenter plans.
Why helium matters for chipmakers
Helium, the second-lightest element, is used across medicine and industry — MRI scanners, optical-fiber production, welding, leak detection and airbags, as well as balloons. For semiconductors, however, ultra-high-purity helium is indispensable. It’s needed to maintain ultraclean and ultracold manufacturing environments, support energy and heat transfer, and operate vacuum chambers. There is no viable substitute for ultra-pure helium in many chipmaking processes, and without it fabrication can slow or stop.
“Helium is expensive relative to other gases, so, for the most part, where there are substitutes for helium, helium is no longer used,” said Phil Kornbluth, president of Kornbluth Helium Consulting, who has more than four decades of experience with commercial helium.
Where helium comes from
Although present in the atmosphere, most industrial helium is extracted from natural gas fields during processing—especially during liquefied natural gas (LNG) production—making helium effectively a byproduct of LNG. A US Geological Survey report estimates about 31.3 billion cubic meters (1.13 trillion cubic feet) of recoverable helium worldwide. Recoverable volumes include about 10.1 billion cubic meters in Qatar (the largest deposit), 8.49 billion in the US, 8.2 billion in Algeria and 6.8 billion in Russia.
Following attacks attributed to Iran, QatarEnergy has halted much of its LNG production, pausing a major source of helium. Iran has also blocked ships from leaving the Persian Gulf through the Strait of Hormuz, putting roughly one-third of global helium supplies offline.
Moving and storing helium
Helium handling is specialized. Most is shipped as ultra-cold liquid; some is transported as compressed gas. While gaseous helium can be stored indefinitely, storage capacity is limited. Underground caverns can hold large quantities of crude helium, but there are only four privately owned cavern facilities worldwide — three in Texas and one in Gronau-Epe, Germany. Most liquid-helium storage tanks at production sites hold only a few days’ to a week’s worth of output, small relative to demand.
Because of transit times, it may take several weeks before users in Asia and Europe feel immediate effects, Kornbluth said. But a prolonged blockade or production interruption will reduce available volumes and push prices higher, noted Michael E. Webber, an energy professor at the University of Texas at Austin.
Supply responses and constraints
For customers such as semiconductor manufacturers, switching suppliers or sourcing helium from other fields isn’t simple. Much helium is locked into long-term contracts, and developing new production takes months. Even untapped helium reserves require time and investment to bring to market, so newly available volumes will likely face intense competition.
Semiconductor demand is growing. Global semiconductor sales reached $791 billion in 2025, up 25.6% from the prior year, according to the Semiconductor Industry Association (SIA). The SIA has warned of supply risks tied to concentrated helium sources in geopolitically sensitive regions, and in January 2023 cautioned that a sudden shock could significantly impact global chip manufacturing.
Recycling and efficiency gains are limited. Helium recycling is still nascent, and chipmakers have already enacted measures to reduce consumption after past disruptions, leaving little additional room for efficiency improvements. Kornbluth recommends that buyers diversify suppliers and source from firms with multiple supply origins to reduce vulnerability.
Outlook
How long Qatar’s production disruptions persist and how quickly shipments resume will determine the severity of the supply shock and price effects. In the meantime, semiconductor firms, datacenter operators and other high-tech users face increased supply risk from a scarce, nonrenewable gas whose global flows are tightly tied to LNG production and regional geopolitics.
Edited by: Rob Mudge