Iran conflict rattles chip, energy markets

The conflict is disrupting the supply of key chipmaking materials, like helium, which is essential for managing heat during manufacturing. A prolonged shortage could halt production and cause chip yields to plummet, leading to more defects and higher prices. West Texas Intermediate crude oil jumped above $100 a barrel, reaching levels not seen since July 2022. Some analysts predict oil could surge to $120 or even $200 per barrel if the Strait of Hormuz sees sustained disruptions. The Strait of Hormuz, a narrow waterway between Iran and Oman, is critical for global oil supply, with roughly 20% of the world's oil supply passing through it daily. Marine insurers are canceling war risk coverage, effectively halting traffic in the strait and increasing oil shipping rates. The Philadelphia Semiconductor Index (SOX), comprising the 30 largest U.S.-traded semiconductor companies, is down 8% since the conflict began. Memory chip stocks are leading this decline as enterprise customers delay AI infrastructure spending.