Iran Conflict Risks Disrupting Global Chip Supply
The conflict between Iran and the US-Israel alliance risks shaking the global semiconductor industry. Prolonged warfare is feared to disrupt supplies of critical raw materials and trigger energy price increases that could suppress chip demand, particularly for artificial intelligence data centre infrastructure.
Several analysts assess that the impact of the current conflict remains relatively limited. However, should the war continue for an extended period, supply chain disruptions and rising energy costs could affect chip production and demand across global markets.
According to CNBC on Wednesday (11 March 2026), semiconductor shares came under pressure due to selling across global equity markets before US President Donald Trump stated on Monday that the war would soon end.
Meanwhile, the VanEck Semiconductor ETF index has fallen approximately 3 per cent since the war began, although it recovered some losses after rising 3.6 per cent on Monday.
SemiAnalysis memory analyst Ray Wang stated that prolonged conflict in the Middle East could disrupt chipmakers’ access to critical raw materials such as helium and bromine.
“For now, the impact is still limited. However, prolonged conflict can trigger supply disruptions or force manufacturers to adjust their primary raw material sources,” Wang said.
One material of concern is helium. This gas is used in the chip production process to assist heat dissipation and in lithography processes used to print complex circuits on chips. To date, no alternative has been found to replace helium in this process.
Data from the United States Geological Survey shows that Qatar produces more than one-third of the world’s helium supply.
In 2023, the Semiconductor Industry Association warned that helium supply disruptions could cause major shocks to the global semiconductor manufacturing industry.
Problems extend beyond production to distribution. Helium shipments from the Middle East could be disrupted if the critical Strait of Hormuz shipping route is closed.
Helium in Qatar is produced as a by-product from liquefied natural gas (LNG) processing by state-owned company QatarEnergy. The company’s Ras Laffan Industrial City facility was reportedly struck by Iranian drone attacks last week, halting operations.
Industry analysts estimate the world could face helium production shutdowns lasting at least two to three months, with supply chains taking four to six months to normalise.