The war is suffocating the lifeline of AI: the global helium shortage threatens to halt the production of chips and MRI machines.
2026-03-31 14:52:48
The war in Iran is not only affecting energy supplies, but is also severely impacting the supply of an invisible gas that is crucial for cooling artificial intelligence (AI) chip manufacturing equipment and maintaining the operation of MRI scanners.
Qatar, which supplies about one-third of the world's helium, is experiencing a global helium shortage due to disruptions in its natural gas exports. Helium, a byproduct of natural gas, is better known for its use in levitating party balloons.
The shortage is straining the market as helium supplies cannot be quickly restored and could affect the production of a wide range of products, from semiconductors to military drone components and space rockets.
Helium is the second most abundant element in the universe after hydrogen, but it is rare on Earth, mainly existing in low concentrations in natural gas deposits. Energy producers separate helium from methane, nitrogen, and other gases, and then transport it as a cryogenic liquid.
The disruption of liquefied natural gas (LNG) shipments from Qatar has directly led to a reduction in helium supplies. Almost all of Qatar's helium is exported through the Strait of Hormuz, a vital commodity transport route that has been paralyzed by the conflict.
Even if the war ends quickly and the Strait of Hormuz reopens, some of the damage will be difficult to recover easily. Qatar stated that the Iranian attack on its Ras Raffaán liquefied natural gas plant earlier in March caused significant damage, resulting in a 14% reduction in its annual helium exports, and the plant's repair work could take up to five years .
Some suppliers have already implemented limited supply.
Industry insiders say that while many chipmakers and defense manufacturers will not immediately feel the helium shortage, suppliers are already informing some customers that supply cuts and additional charges are expected.
Helium is deeply integrated into many modern industries. Its excellent thermal conductivity makes it ideal for rapid cooling. Chip manufacturers use helium to maintain temperature stability when etching silicon wafers into advanced semiconductors.
For many current semiconductor cooling applications, helium has no readily available substitute. The medical industry uses it to cool superconducting magnets inside MRI scanners. It also supports aerospace technology, including NASA missions where helium is used to purge rocket fuel tanks. Furthermore, it is crucial in fiber optic manufacturing and defense applications.
South Korea, a major chip manufacturer heavily reliant on Qatar for supplies, is currently in talks with US producers seeking additional helium supplies. According to Fitch Ratings, approximately two-thirds of South Korea's helium imports last year came from Qatar.
Chip companies had helium stockpiles. Additionally, a shipment was en route to Asia at the start of the conflict. Both of these factors helped delay the onset of the shortage.
Chipmaker GlobalFoundries stated that it is actively monitoring developments in the Middle East but does not expect any immediate impact. GlobalFoundries has manufacturing operations in the United States, Europe, and Asia. The company stated, "The situation is still evolving."
Market observers say that helium users, who mostly lock in supplies through long-term contracts, are now scrambling to buy scarce short-term spot goods, a bidding war that has caused prices to more than double .
According to a letter to customers seen by The Wall Street Journal, U.S. industrial gas supplier Airgas declared force majeure earlier this month due to supply disruptions in Qatar and informed one customer that the company would only be able to meet half of its normal monthly helium demand. Airgas also told the customer that it would charge an additional $13.50 per 100 cubic feet on top of the contract price.
Helium buyers as far away as India and Brazil have also recently received force majeure notices from their suppliers.
In Germany, the chemical industry organization VCI stated that the conflict has raised concerns about bottlenecks in the supply of raw materials, including helium.
The United States, the world's largest producer of helium, has been less affected so far, but analysts say that if Qatar suspends supplies for an extended period, the United States will also be severely impacted.
One issue is that helium, especially cryogenic liquid helium used for transportation, has a practical shelf life. Liquid helium continuously absorbs heat and gradually turns back into a gas, causing the pressure inside the container to rise. If the maximum pressure is exceeded, the helium will escape—a process known in industry terms as "evaporation loss."
Phil Kornbrus, president of the American consulting firm Kornbluth Helium Consulting, said that most containers have a shelf life of 35 to 48 days, after which excessive gas loss will begin to occur.
Currently, hundreds of specialized cryogenic containers are stranded in the Middle East, with each container costing approximately $1 million.
Companies are already preparing for potentially more severe supply shortages in the future. Fitch Ratings stated that major Asian chipmakers have conducted a comprehensive assessment of their helium inventories.
Anish Kapadia, founder of the UK-based consultancy AKAP Energy, said he's been overwhelmed with calls from clients about the impending impact. He added that gas suppliers might prioritize chipmakers and medical imaging companies. "Party balloons will be the first to be affected," Kapadia said. "You can easily reduce that supply and deal with a few angry parents. But it's clear that when a third of the global supply disappears from the market overnight, every industry will be significantly impacted."
Pulsar is a helium exploration company with projects in Minnesota and Greenland. Clive Kane, Pulsar's business and external affairs manager, said, "This is the big thing we've been worried about all along; it's a black swan event, and the tension between who gets helium and who doesn't is only going to escalate."
"The helium supply shock highlights a deeper vulnerability in AI development: an extreme dependence on a few high-risk geopolitical nodes," said Ralph Gubler, research director at S&P Global Energy, which specializes in industrial gases.
Last year, global helium production was approximately 190 million cubic meters, enough to fill about 76,000 Olympic-sized swimming pools.
Helium is a non-renewable gas produced by radioactive decay deep within the Earth. Once released into the atmosphere, it will escape into space.
The conflict with Iran, through the blockade of the Strait of Hormuz and the destruction of Qatar's Ras Raffarin LNG plant, directly disrupted approximately one-third of the global helium supply, leading to soaring prices, supply rationing, and frequent force majeure notices. This event not only threatens AI chip manufacturing and the semiconductor industry but also impacts multiple high-tech sectors such as medical imaging, aerospace, defense, and fiber optics, highlighting the extreme vulnerability of global supply chains to a few geopolitical risk points. The recovery period could last for several years, with limited short-term inventory buffers, but in the long term, it will drive the industry to accelerate supply diversification and the development of alternative technologies.
Qatar, which supplies about one-third of the world's helium, is experiencing a global helium shortage due to disruptions in its natural gas exports. Helium, a byproduct of natural gas, is better known for its use in levitating party balloons.
The shortage is straining the market as helium supplies cannot be quickly restored and could affect the production of a wide range of products, from semiconductors to military drone components and space rockets.
Details of Qatar supply disruption
Helium is the second most abundant element in the universe after hydrogen, but it is rare on Earth, mainly existing in low concentrations in natural gas deposits. Energy producers separate helium from methane, nitrogen, and other gases, and then transport it as a cryogenic liquid.
The disruption of liquefied natural gas (LNG) shipments from Qatar has directly led to a reduction in helium supplies. Almost all of Qatar's helium is exported through the Strait of Hormuz, a vital commodity transport route that has been paralyzed by the conflict.
Even if the war ends quickly and the Strait of Hormuz reopens, some of the damage will be difficult to recover easily. Qatar stated that the Iranian attack on its Ras Raffaán liquefied natural gas plant earlier in March caused significant damage, resulting in a 14% reduction in its annual helium exports, and the plant's repair work could take up to five years .
Some suppliers have already implemented limited supply.
Impact on the AI chip and semiconductor industry
Industry insiders say that while many chipmakers and defense manufacturers will not immediately feel the helium shortage, suppliers are already informing some customers that supply cuts and additional charges are expected.
Helium is deeply integrated into many modern industries. Its excellent thermal conductivity makes it ideal for rapid cooling. Chip manufacturers use helium to maintain temperature stability when etching silicon wafers into advanced semiconductors.
For many current semiconductor cooling applications, helium has no readily available substitute. The medical industry uses it to cool superconducting magnets inside MRI scanners. It also supports aerospace technology, including NASA missions where helium is used to purge rocket fuel tanks. Furthermore, it is crucial in fiber optic manufacturing and defense applications.
South Korea, a major chip manufacturer heavily reliant on Qatar for supplies, is currently in talks with US producers seeking additional helium supplies. According to Fitch Ratings, approximately two-thirds of South Korea's helium imports last year came from Qatar.
Chip companies had helium stockpiles. Additionally, a shipment was en route to Asia at the start of the conflict. Both of these factors helped delay the onset of the shortage.
Chipmaker GlobalFoundries stated that it is actively monitoring developments in the Middle East but does not expect any immediate impact. GlobalFoundries has manufacturing operations in the United States, Europe, and Asia. The company stated, "The situation is still evolving."
Price Surge and Supply Distribution
Market observers say that helium users, who mostly lock in supplies through long-term contracts, are now scrambling to buy scarce short-term spot goods, a bidding war that has caused prices to more than double .
According to a letter to customers seen by The Wall Street Journal, U.S. industrial gas supplier Airgas declared force majeure earlier this month due to supply disruptions in Qatar and informed one customer that the company would only be able to meet half of its normal monthly helium demand. Airgas also told the customer that it would charge an additional $13.50 per 100 cubic feet on top of the contract price.
Helium buyers as far away as India and Brazil have also recently received force majeure notices from their suppliers.
Widespread impact across multiple industries
In Germany, the chemical industry organization VCI stated that the conflict has raised concerns about bottlenecks in the supply of raw materials, including helium.
The United States, the world's largest producer of helium, has been less affected so far, but analysts say that if Qatar suspends supplies for an extended period, the United States will also be severely impacted.
One issue is that helium, especially cryogenic liquid helium used for transportation, has a practical shelf life. Liquid helium continuously absorbs heat and gradually turns back into a gas, causing the pressure inside the container to rise. If the maximum pressure is exceeded, the helium will escape—a process known in industry terms as "evaporation loss."
Phil Kornbrus, president of the American consulting firm Kornbluth Helium Consulting, said that most containers have a shelf life of 35 to 48 days, after which excessive gas loss will begin to occur.
Currently, hundreds of specialized cryogenic containers are stranded in the Middle East, with each container costing approximately $1 million.
Companies are already preparing for potentially more severe supply shortages in the future. Fitch Ratings stated that major Asian chipmakers have conducted a comprehensive assessment of their helium inventories.
Anish Kapadia, founder of the UK-based consultancy AKAP Energy, said he's been overwhelmed with calls from clients about the impending impact. He added that gas suppliers might prioritize chipmakers and medical imaging companies. "Party balloons will be the first to be affected," Kapadia said. "You can easily reduce that supply and deal with a few angry parents. But it's clear that when a third of the global supply disappears from the market overnight, every industry will be significantly impacted."
Supply chain vulnerability exposure
Pulsar is a helium exploration company with projects in Minnesota and Greenland. Clive Kane, Pulsar's business and external affairs manager, said, "This is the big thing we've been worried about all along; it's a black swan event, and the tension between who gets helium and who doesn't is only going to escalate."
"The helium supply shock highlights a deeper vulnerability in AI development: an extreme dependence on a few high-risk geopolitical nodes," said Ralph Gubler, research director at S&P Global Energy, which specializes in industrial gases.
Last year, global helium production was approximately 190 million cubic meters, enough to fill about 76,000 Olympic-sized swimming pools.
Helium is a non-renewable gas produced by radioactive decay deep within the Earth. Once released into the atmosphere, it will escape into space.
Editor's Summary
The conflict with Iran, through the blockade of the Strait of Hormuz and the destruction of Qatar's Ras Raffarin LNG plant, directly disrupted approximately one-third of the global helium supply, leading to soaring prices, supply rationing, and frequent force majeure notices. This event not only threatens AI chip manufacturing and the semiconductor industry but also impacts multiple high-tech sectors such as medical imaging, aerospace, defense, and fiber optics, highlighting the extreme vulnerability of global supply chains to a few geopolitical risk points. The recovery period could last for several years, with limited short-term inventory buffers, but in the long term, it will drive the industry to accelerate supply diversification and the development of alternative technologies.
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