Qatar helium shutdown adds new risk to chip supply chain

(By Caixin journalist Qin Min)

Military strikes tied to the US-Iran war have forced QatarEnergy to halt liquefied natural gas production, disrupting about 30% of global helium supply and sending prices higher for a gas that is critical to semiconductor manufacturing.

QatarEnergy said 2 March that it had stopped producing LNG and related products after operating facilities in Ras Laffan Industrial City and Mesaieed Industrial City came under military attack. A day later, the state energy giant said it would also suspend some downstream production including urea, polymers, methanol and aluminium.

The shutdown has rippled far beyond the energy market. QatarEnergy operates three large helium purification plants in Ras Laffan, forming the world’s biggest helium production base. Because helium is extracted from helium-bearing natural gas, the halt in LNG production has also interrupted helium output. Helium is used daily in chip fabrication and cannot easily be replaced.

“Helium is indispensable in semiconductor manufacturing,” said Feng Jinfeng, deputy secretary-general of the Shanghai Integrated Circuit Industry Association. He said the gas is used in EUV lithography cooling, wafer thermal management and temperature control during etching, adding that no other gas can fully substitute for it.

Leslie Wu, CEO of Dalian Ronghe Enterprise Management Consulting Co. Ltd., said helium serves as a coolant, a carrier gas and a medium for helium mass spectrometry leak detection, making it one of the key raw materials in chip production.

Qatar’s importance in the helium market stems from the sheer scale of its North Field, the world’s largest associated natural gas field. Although the field has a relatively low helium concentration of about 0.04%, Wu said its massive size means it accounts for roughly one-fifth of global helium reserves. Working with Air Liquide S.A., QatarEnergy built what he described as the world’s largest single helium production facility.

Qatar now represents about 30% of global helium production capacity, Wu said. The sudden shutdown has therefore removed a significant share of global supply at once, making higher prices all but inevitable.

“Global helium prices have already doubled compared with levels before and after the closure of the Strait of Hormuz,” Wu said. He added, however, that the current increase remains more manageable than the spike in neon prices during the Russia-Ukraine war in 2022, when prices rose seven- to tenfold.

China is already seeing some price pressure. According to commodity information provider Sublime China Information Co. Ltd., the average daily price in Shanghai for a 40-litre cylinder of high-purity helium had been steady at 575 RMB (US$83) since February. On 5 March, that jumped to 600 RMB a cylinder and has remained at that level. Domestic bulk high-purity helium is now trading at 78.5 to 83 RMB per cubic metre, while imported supplies are selling for 85 to 90 RMB.

Feng said the full impact on Asia has yet to be felt because helium shipments from Qatar to China usually take 30 to 45 days.

“The closure of the Strait of Hormuz means supplies arriving in China, South Korea and Japan in early April will be sharply reduced. Prices could rise further in late March and early April,” he told Caixin.

Some markets are more exposed than others. Feng said South Korea depends on Qatar for more than 70% of its helium supply. He linked recent turmoil in the Korean stock market to concerns that a supply cut could hit major chipmakers, noting that Samsung Electronics Co. Ltd. and SK Hynix Inc. together account for more than 40% of the market’s weighting. Fears over helium shortages affecting wafer production, he said, contributed to sharp declines in both stocks.

China appears less vulnerable in the near term. Feng said domestic suppliers such as Guangzhou Guanggang Gases & Energy Co. Ltd. and Guangdong Huate Gas Co. Ltd. hold inventories that should help stabilise supply, and that the helium disruption is unlikely to have a material impact on semiconductor manufacturing in China over the next three months.

China still relies heavily on imports, however. According to Sublime China Information, about 85% of the country’s helium supply comes from abroad. China’s helium imports rose 22% in 2025 to 4,924 tons, with Qatar accounting for about 54% of those imports. Because of abundant supply from Qatar and Europe, as well as domestic helium projects and storage reserves, China’s near-term helium market remains relatively well supplied, the firm said.

Globally, the market has other sources of supply. Wu said the US accounts for roughly 35% of global helium production capacity, while Russia and Algeria each represent about 10%, and Canada less than 5%.

“Global helium supply sources are relatively diversified,” Wu said. “Qatar’s missing capacity can be partly offset by higher production from the US, Algeria and Canada. There will not be a complete supply cutoff. The main effect is short-term price volatility, which raises semiconductor production costs.”

For companies across the supply chain, he said, the bigger problem is uncertainty. “What war brings is uncertainty and fear,” Wu said. “Before the situation becomes clear, industries do not know how to respond. Once it does, they will find ways to adapt, and supply chains will be restructured.”

This article was first published by Caixin Global as “Qatar Helium Shutdown Adds New Risk to Chip Supply Chain”. Caixin Global is one of the most respected sources for macroeconomic, financial and business news and information about China.

Related: What does the Iran crisis mean for the global economy? | Why America fights alongside Israel as China holds back in Iran