Helium shortage hinders chip manufacturing

Reuters reported on March 26 that tightened helium supply linked to the Middle East conflict had started affecting parts of the global technology supply chain, with industry executives saying companies were seeking alternative sources. Helium is used in chipmaking for cooling, leak detection and other precision manufacturing steps, according to Reuters and the U.S. Geological Survey. Qatar is a pivotal supplier because its helium is produced as a byproduct of natural gas processing at Ras Laffan. The latest discussion of the issue spread again in a May 16 social-media post that tied chip-fab risks to Qatar’s role in the helium market. ### How much of the world’s helium does Qatar actually supply? QatarEnergy LNG says on its Ras Laffan helium operations page that its two helium plants can supply about 25% of total world helium production. The company says Helium 2, which began production in 2013, is the world’s largest helium plant, and that the two facilities run through sales arrangements with Air Liquide, Linde and Iwatani. Reuters, citing U.S. Geological Survey data, reported on March 26 that Qatar produced nearly one-third of world supply. The U.S. Geological Survey’s 2025 Mineral Commodity Summaries does not give a single global market-share line for Qatar on the page retrieved here, but it shows Qatar accounted for 40% of U.S. helium imports from 2020 through 2023. (qatarenergylng.qa) ### Why does helium matter inside a chip plant? The U.S. Geological Survey said helium use in the United States in 2024 included “controlled atmospheres, fiber optics, and semiconductors,” which together accounted for 15% of apparent consumption. The same USGS summary said helium used in large-volume applications in the United States is seldom recycled, though recycling is more common elsewhere. Reuters reported on March 26 that helium is used in several key stages of chipmaking, including cooling, leak detection and precision manufacturing processes. (money.usnews.com) Industry executives told Reuters at Semicon China in Shanghai that the supply squeeze had already begun to affect some production and that companies were scrambling for alternative supply. (pubs.usgs.gov) ### What set off the latest shortage? Reuters reported on March 12 that disruptions to Qatar’s natural-gas processing from the Iran war had driven helium prices sharply higher. Reuters said spot helium prices had doubled since the Middle East crisis began, citing Phil Kornbluth, president of Kornbluth Helium Consulting, and reported that QatarEnergy had halted production at its 77 million-metric-ton-per-year LNG facility and declared force majeure on LNG shipments. (money.usnews.com) Chemical & Engineering News reported on March 6 that attacks on Qatar and disruption around the Strait of Hormuz had removed one-third of the world’s helium from the market. That report cited a March 4 Gasworld webinar and said prolonged disruption could take months to resolve even if the immediate conflict eased. ### Are chip companies saying the shortage is already hitting production? (zawya.com) Cameron Johnson, a senior partner at Tidal Wave Solutions, told Reuters on March 26 that “a helium shortage is an absolute concern” and said companies had few immediate options beyond slowing output and prioritizing critical products. Jerry Zhang, China sales head at Swiss semiconductor components firm VAT, told Reuters the tighter supply was already affecting production at his company and others, with transport delays adding to the strain. (cen.acs.org) Moody’s Ratings said in an April report, as summarized by Data Center Dynamics, that helium supply disruptions linked to the Middle East conflict were expected to affect semiconductor manufacturing and, in turn, AI and data-center supply chains. Data Center Dynamics said the Moody’s report put Qatar’s share of global high-purity helium production at about 30%. (money.usnews.com) ### What does India’s Gujarat buildout have to do with this? Reuters reported on May 16 that Tata Electronics and ASML signed an agreement to build India’s first front-end semiconductor fabrication plant in Gujarat. The deal is part of India’s broader push to build a domestic chip industry. India Semiconductor Mission said on May 5 that the cabinet had approved two more semiconductor manufacturing units with cumulative investment of more than 3,900 crore rupees, and listed multiple Gujarat milestones this year, including the March 31 inauguration of the Kaynes Semicon plant at Sanand and the February 28 inauguration of Micron Technology’s assembly, test and packaging facility in Sanand. (datacenterdynamics.com) May 5 is the next concrete milestone in the official record cited here: India Semiconductor Mission’s announcement on two newly approved projects in Gujarat. (msn.com) Reuters’ May 16 report on Tata Electronics and ASML adds another named participant to that buildout as companies and governments track helium availability and chip-factory timelines. (ism.gov.in)