Beyond Oil: Middle East Tensions Chokehold Global Helium Supply

 

 

Helium is a finite resource that plays a critical role across several industries, including semiconductor manufacturing, medical imaging, aerospace engineering, chemicals and pharmaceuticals, fiber optics, particle physics, scientific balloons, and many more, with limited or no available alternatives in some cases. With the ongoing crisis in the Middle East and the blockade of the Strait of Hormuz paralyzing a major transport route for global energy, the repercussions are beyond just oil & gas and extend to the world's helium supply, with downstream impact on industries such as semiconductor manufacturing that are critically reliant on helium.

 

 

Sophisticated semiconductor products can have over a billion transistors etched onto silicon die the size of a fingernail. Realizing this complexity requires multiple steps within the manufacturing line to precisely control processes at the atomic level, across wafers that can be 12 inches in diameter.

 

Many chemicals and gases are critical to the semiconductor manufacturing process. Helium is one of them owing to its cryogenic properties, exceptional thermal conductivity, chemical inertness, small size, and high diffusivity, with no direct substitutes. It is used throughout the manufacturing line and is essential to the operation of fabrication facilities. According to IDTechEx's forecasts in its report "Helium for Semiconductors and Beyond 2025-2035: Market, Trends, and Forecasts", helium demand for semiconductor manufacturing is set to increase over 5-fold by 2035.

 

 

 

For instance, within the manufacturing line, helium is essential as a carrier gas for deposition processes, as a dilutant in plasma etching, as well as wafer cooling to minimize warpage under thermal stress. It is essential for extreme ultraviolet (EUV) lithography in sub-5nm chip manufacturing, critical for AI applications, to cool wafers and tools. Separately during factory operations, it is also a gas that is used in leak and safety testing of pipelines and equipment, as well as ultra-clean atmosphere for manufacturing processes.

 

 

Globally, known helium reserves are mainly in Qatar, US, Algeria, Russia, Canada, and China, with Qatar having the largest reserves (>10,000 million m3). Qatar is one of the main suppliers along with the US and Russia, with Qatar being the second largest producer, supplying over a third of the world's helium supply.

 

How helium is produced also matters, because it is generally produced as a by-product of natural gas processing, where helium is present at very small quantities (typically 0.3-0.5% depending on the reserve). Separating helium from natural gas requires a series of processing such as cryogenic separation for nitrogen and helium rejection, membrane and pressure swing adsorption (PSA), and further cryogenic liquefaction for transportation. This is all capital intensive, so it only makes sense to produce helium only if the facilities are processing huge amounts of natural gas. Hence, Qatar's Ras Laffan facility is such a critical one due to its scale of operation.

 

Qatar and Russia are also important players because both have been focused on expanding production of helium and with Qatar's Ras Laffan taking the hit and shut down, this is already having an impact on helium pricing and supply. Even if facilities restart now (even partially), there will be a backlog, the implications of which will be felt across the value chain.

 

 

Firstly, under normal circumstances, helium is a gas that leaks very easily, leaking from helium storage containers at a rate of ~1% per day according to industry experts, so it is very difficult to store and have substantial inventory. In fact, it is used for leak testing for that purpose. This means semiconductor fabs are reliant on a stable supply. Supply disruptions can slow production, and significant delays can result in facility shutdowns in extreme cases.

 

Fabs like TSMC usually have a few months of inventory and utilize helium recycling systems, but whether fabs are able to weather this storm will depend entirely on how long the disruptions last for. If it continues for several months, this is going to have massive implications for the semiconductor industry, particularly with the growing demand for ever sophisticated chips for AI and HPC that require sub-5nm nodes.

 

Also, it is also important to look at regions where semiconductor manufacturing giants are located. Countries that have diversified their sourcing of helium also have a stronger position. For example, Taiwan reportedly sources ~2/3^rd of its helium from Qatar and the US, with the remainder from other sources. On the other hand, South Korea reportedly sourced ~65% of its helium from Qatar in 2025, which leaves local semiconductor manufacturers vulnerable to supply chain challenges. Thus, players such as Samsung and SK Hynix have reportedly secured long-term supply agreements with players such as Linde and Air Products that source a large share of their helium from the US.

 

 

While helium as a by-product of natural gas is the primary method of helium production, in countries such as the US and Canada, there are geological hotspots where helium concentrations in reserves can be present at concentrations ranging from 0.3-10%. This opens opportunities for smaller players to enter the field. IDTechEx reports that low-capex separation systems, such as membrane and PSA technologies, can be used to upgrade and purify the helium acquired from these sources, with players adopting PSA, membrane, or a hybrid PSA + membrane system depending on the separation objective. With insights gained through interviews with key technology developers such as Generon and UGS, IDTechEx's report provides comprehensive market analysis of these technologies, with product benchmarks and case studies.

 

 

If these challenges persist, we may see more adoption of conservation efforts or helium recycling in semiconductor manufacturing. In fact, a major success story has been in the use of helium for MRI scanners, where modern MRI systems have seen technology improvements and closed loop systems to recirculate the helium to avoid helium refills.

 

That being said, within the exception of the current crisis, there have been 4 pronounced helium shortages over the last 20 or so years, impacting market availability and price of helium. As such, industries critically reliant on helium usually have contingency measures in place, such as diverse supply sources to safeguard against short-term disruptions. However, how well industries like semiconductor manufacturing are able to weather the storm will depend entirely on how long the disruptions last for. Persistent market volatility may drive industries to increasingly diversify their helium supply chains to not rely significantly on one country alone, with a more balanced approach including Qatar, Russia, and the US.

 

IDTechEx's report on Helium for Semiconductors and Beyond 2025-2035: Market, Trends, and Forecasts provides key market insights into the production and supply of helium, the major applications, outlook, and trends in how industries are adapting to cope with chronic supply challenges with helium conservation methods (e.g. reclamation technologies) or adopting substitutes where possible.

 

For more information on this report, including downloadable sample pages, please visit www.IDTechEx.com/Helium, or for the full portfolio of research available from IDTechEx, see www.IDTechEx.com .