US-Israel-Iran Conflict Raises Concerns Over Semiconductor Supply Chains

The ongoing US-Israel war with Iran could disrupt supplies of key materials used in semiconductor manufacturing, a South Korean lawmaker warned on Thursday as the Middle East conflict entered its sixth day.

Kim Young-bae, a ruling party legislator, spoke after meeting with executives from major chipmakers, including Samsung Electronics, and industry trade groups. He said officials highlighted potential disruptions in semiconductor production if critical materials, such as helium, cannot be sourced from the Middle East. Helium is vital for heat management in chip production and currently has no viable alternatives. Qatar is among the leading global producers of helium.

South Korea’s chip industry provides roughly two-thirds of the world’s memory chips and is already grappling with supply constraints due to surging demand from artificial intelligence data center operators. The lawmaker noted that a prolonged conflict in Iran could also drive up energy costs and commodity prices, adding further pressure on the sector.

In response, South Korean chipmaker SK Hynix said it has “long secured diverse supply chains and sufficient inventory” of helium and sees “almost no chance” of disruption. Samsung declined to comment. Taiwan’s TSMC said it does not currently expect any significant impact but will continue monitoring the situation. Contract chipmaker GlobalFoundries added that it is in direct contact with suppliers, customers, and partners in the region, with mitigation plans already in place.

South Korea’s Ministry of Trade, Industry, and Energy said the country depends on the Middle East for 14 items used in semiconductor production, including bromine and chip inspection equipment. Many of these materials, the ministry said, can be sourced domestically or from alternative markets.

The conflict could also affect the expansion of AI data centers in the region. Kim highlighted that the crisis might delay plans by major tech firms to establish AI computing hubs in the Middle East, which could weigh on chip demand in the longer term. Drone strikes reportedly damaged Amazon data centers in the UAE and Bahrain earlier this week, raising concerns about the pace of Big Tech’s investments.

US companies such as Microsoft and Nvidia have been positioning the UAE as a regional center for AI computing, powering services like ChatGPT. The disruption of supply chains and local infrastructure could challenge these plans.

The escalation in the Middle East intensified on Thursday after Iran launched missiles at Israel in retaliation for US and Israeli strikes that followed the death of Iran’s Supreme Leader Ayatollah Ali Khamenei. The conflict has heightened geopolitical risks in a region that supplies critical energy and industrial materials globally.

Analysts and industry officials are closely monitoring the situation, noting that even short-term disruptions could ripple across global semiconductor production and technology markets.