Iran war could disrupt supply of semiconductor materials, South Korea warns – National
A US-Israel war with Iran could disrupt supplies of key semiconductor materials, a South Korean ruling party spokesman said Thursday, as the conflict in the Middle East entered its sixth day.
South Korea’s chip industry, which supplies about two-thirds of the world’s memory chips, is also concerned that a prolonged conflict with Iran will lead to higher energy costs and prices, Kim Young-bae said after meeting with executives at companies such as Samsung Electronics 005930.KS and trade groups.
“Officials have raised the possibility that semiconductor production could be disrupted if some of these key materials are unavailable in the Middle East,” he said at a press conference, giving helium as one example.
Helium is essential for controlling heat during semiconductor manufacturing and there are currently no viable alternatives. It is produced in only a few countries, and Qatar is among the leading players in this sector.
The warnings come as chipmakers face severe supply constraints due to growing demand for chips from AI data center workers that has tightened supply in many other industries, including smartphones, laptops and cars.
South Korean chip maker SK Hynix 000660.KS said in a statement that “various supply chains and sufficient quantities” of helium have been secured for a long time, “so there is almost no chance that the company will be affected.”
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Samsung declined to comment.
Taiwan’s TSMC 2330.TW said in a statement that it did not expect any major impact at this time, and would continue to monitor the situation closely.
Contract manufacturer GlobalFoundries GFS.O said it was “directly communicating with suppliers, customers and partners in the region,” and “reduction plans” were in place.
South Korea’s industry ministry said the country relies heavily on the Middle East for 14 other materials in the chip supply chain, including bromine and chip testing equipment, but most of them can be sourced domestically or in other markets.
South Korea’s chip industry has also warned that the crisis could set back big tech companies’ plans to build AI data centers in the Middle East in the long term, thus addressing chip demand, said Kim, who is a ruling party lawyer.
Amazon AMZN.O said on Monday that some of its data centers in the United Arab Emirates and Bahrain had been damaged by drone strikes, raising questions about the speed of Big Tech’s expansion in the region.
US giants such as Microsoft MSFT.O and Nvidia NVDA.O have positioned the UAE as a regional hub for the artificial intelligence computing needed to run services such as ChatGPT.
Iran launched a wave of missiles at Israel early Thursday in retaliation for US and Israeli strikes that killed Supreme Leader Ayatollah Ali Khamenei on Saturday.
