How the Iran war and rising energy prices are threatening semiconductor demand
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A prolonged U.S.-Israel war against Iran could lead to shortages of key chipmaking materials and higher energy costs which could hurt semiconductor demand.
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In this article SMH Follow your favorite stocks CREATE FREE ACCOUNT SK Hynix Inc. 12-layer HBM3E memory chips, front, and a LPDDR5X CAMM2 memory module arranged at the company's office in Seongnam, South Korea, on Tuesday, April 22, 2025. SeongJoon Cho | Bloomberg | Getty Images A prolonged conflict in the Middle East could impact the semiconductor industry's access to key materials while rising costs could hit demand for chips that have been central to the artificial intelligence boom, analysts warned. The U.S.-Israel war with Iran has shone a spotlight on the role countries in the Middle East play in the complex and intricate semiconductor supply chain. Semiconductor stocks were caught in the sell-off seen in equity markets before President Donald Trump said on Monday that war will end "very soon." Memory chipmakers SK Hynix and Samsung have been hit particularly badly with more than $200 billion wiped off their combined value since the start of the war, even with both stocks rallying sharply on Tuesday. The VanEck Semiconductor ETF is down about 3% since the start of the war paring some losses after a 3.6% jump on Monday. "A prolonged regional conflict could potentially disrupt chipmakers' manufacturing operations regarding sourcing materials like Helium and Bromine," Ray Wang, memory analyst at SemiAnalysis, told CNBC. "For now, the impact appears to be limited. However, a prolonged conflict could eventually lead to disruptions or require adjustments in the sourcing of key materials." Middle East key to chip industry A South Korean lawmaker warned last week that the Iran war could hamper access to key materials from the Middle East such as helium, Reuters reported. The lawmaker also warned a prolonged conflict could lead to higher energy prices. So, what exactly is the role of certain countries in the Middle East in the semiconductor supply chain? Qatar produces over a third of the world's helium supply, according to the U.S. Geological Survey. Helium is used in...
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