A new "trial by fire" for the global semiconductor industry.

The ongoing conflict in the Middle East is not only shaking energy markets but also posing risks to the global semiconductor industry – a sector that has benefited greatly from the boom in artificial intelligence (AI).

According to analysts, if the conflict continues, the chip industry could face two pressures simultaneously: disruptions to the supply of critical materials and weakening demand due to rising energy costs.

Semiconductor chips on a circuit board. Illustration: REUTERS/TTXVN

Disruptions in raw material supply.

The conflict between the US, Israel, and Iran is highlighting the Middle East's role in the global semiconductor supply chain – a complex system dependent on a wide variety of specialized materials.

Immediately after the outbreak of hostilities, semiconductor stocks were sold off along with the stock market. The situation only stabilized somewhat after US President Donald Trump suggested the war could soon end.

South Korea's leading memory chip manufacturers, Samsung Electronics and SK hynix, have been particularly hard hit. Since the start of hostilities, the combined market capitalization of the two companies has evaporated by more than $200 billion, although their shares recovered significantly in trading on March 10th.

According to Ray Wang, a memory analyst at SemiAnalysis, a prolonged conflict could disrupt access to critical materials in chip manufacturing, particularly helium and bromine. Helium plays a vital role in semiconductor manufacturing, helping to dissipate heat during fabrication and is used in lithography—a crucial step in printing highly sophisticated circuits onto chips. According to the U.S. Geological Survey, Qatar alone supplies more than one-third of the world's helium, and there are currently no viable alternatives.

Previously, the Semiconductor Industry Association (SIA) warned that if the helium supply were disrupted, the global semiconductor manufacturing industry could face a major shock.

Not only production, but also the transportation of helium out of the Middle East is at risk if shipping through the Strait of Hormuz is disrupted. According to Phil Kornbluth, President of Kornbluth Helium Consulting, if the Strait of Hormuz is closed for an extended period, more than 25% of the global helium supply could be removed from the market.

Meanwhile, Qatar Energy's Ras Laffan industrial complex – which produces helium as a byproduct of liquefied natural gas (LNG) – was attacked by Iranian drones last week, forcing a temporary shutdown. Kornbluth suggested the world could face at least 2-3 months of helium production disruption, and another 4-6 months for the supply chain to return to normal.

Besides helium, bromine is another important raw material in semiconductor production. According to data from the U.S. Geological Survey, about two-thirds of global bromine production comes from Israel and Jordan.

Rising energy costs threaten chip demand.

Besides supply chain risks, rising energy prices could also impact chip demand, especially for chips used in AI infrastructure.

Many of the chips currently in high demand—from Nvidia's graphics processors to memory chips manufactured by Samsung Electronics and SK hynix—are primarily used in data centers running massive AI models. These data centers consume enormous amounts of power and are being built at a rapid pace by major US technology corporations such as Microsoft and Amazon.

The Middle East conflict caused Brent crude oil prices to briefly exceed $100 per barrel, increasing operating costs for already energy-intensive data centers. According to analyst Jing Jie Yu at Morningstar, AI data centers consume 3-5 times more electricity than conventional data centers.

Rising energy costs could significantly increase the total cost of owning AI infrastructure, forcing tech companies to reconsider their investment pace. In a prolonged conflict scenario, demand for memory chips used in AI could decline.

Manufacturers are under immense pressure.

Samsung Electronics and SK hynix are the two largest memory chip manufacturers in the world. These chips are used not only in smartphones and laptops, but are also crucial components in AI data centers.

One particularly important type of chip is high-bandwidth memory (HBM) – a vertically stacked form of DRAM memory – which is a key component in Nvidia's AI systems.

In recent years, the enormous demand from technology corporations has driven up the majority of the global memory chip supply to AI infrastructure projects. This has created a shortage of memory chips and driven up their prices sharply, contributing to high profits and strong stock price increases for Samsung Electronics and SK hynix over the past nine months.

However, the prospect of rising energy costs and potentially weakening demand is causing concern among investors. According to MS Hwang at Counterpoint Research, electricity accounts for about half of a data center's operating costs, with about half of that used to power storage.

This means that if memory chip prices continue to rise due to supply chain instability, while energy costs also escalate, data center operators may be forced to cut investments, leading to weaker semiconductor demand.

However, Jing Jie Yu said that Samsung Electronics and SK Hynix have now signed contracts for the supply of HBM chips for the entire year, and have sufficient reserves to maintain production in the immediate future.
However, if the conflict continues, the development of AI infrastructure could be delayed, especially for conventional DRAM chips not protected by long-term contracts. This could lead to a decline in DRAM prices, and chip manufacturers' revenues risk falling short of market expectations.

Source: https://baotintuc.vn/kinh-te/cu-thu-luamoi-doi-voi-nganh-ban-dan-toan-cau-20260311222909345.htm