The past decade has seen an increase in global conflict. For investors, those tensions can mean short-term volatility and sector-specific disruptions. Historically, markets have recovered relatively quickly after geopolitical shocks -- which is one reason major indexes have set all-time highs in recent weeks, even as oil prices soar.
However, some economists warn that markets are underestimating the impact of the oil price shock caused by the war in Iran and the near stoppage of transit through the Strait of Hormuz. Oil is not the only commodity to be affected, either. The conflict has hampered the movement and production of other essential commodities, including helium.
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Helium plays a vital role in semiconductor manufacturing, particularly in producing chips for artificial intelligence (AI) data centers. Spot helium prices have doubled since the start of the war, and even if the war ends this week, it could take years for supplies to normalize.
What's going on with helium
Helium is irreplaceable in several stages of chipmaking, including etching, the process of marking complex circuit patterns. Its extremely high thermal conductivity also makes it ideal for cooling. As demand for chips soars, in a worst-case scenario, a prolonged helium shortage could mean chip manufacturing downtime.
Helium is a by-product of liquefied natural gas (LNG) production. Qatar, which accounts for about a third of the world's helium supply, has shut down a lot of its gas production. Attacks on its Ras Laffan plant, the world's largest LNG processing facility, forced it to halt operations. Repairs could take as long as five years, and the Qatar gas authority expects its annual helium exports to fall by 14%.
Another issue is that helium is hard to store, and Qatar can't move its existing reserves through the Strait of Hormuz. Helium gets transported in liquid form, but after a month or two, it reverts to gas and starts to escape. When the conflict ends and the strait reopens, there will be a lag before shipping routes are reestablished, by which time Qatar's helium stocks will likely have evaporated.
These two AI growth stocks could have a helium problem
Semiconductor makers in Asia, particularly in South Korea, which imports more than 60% of its helium from Qatar, face the biggest challenge. Those include Samsung (SSNLF +0.00%) and SK Hynix (HYNSE +0.00%). Semiconductors accounted for more than half of Samsung's 2026 first-quarter revenue, and the company forecasts that high memory demand will continue into Q2.
OTC: SSNLF
Key Data Points
Samsung told investors on its latest earnings call that it has secured alternative suppliers for the raw materials it needs, which lines up with reports that it and SK Hynix have signed contracts with U.S. helium firms Air Products and Chemicals (APD 2.07%) and Linde (LIN 0.31%). It's also worth noting that helium accounts for a tiny percentage of total chip production costs, making it feasible for manufacturers to absorb significantly higher prices to secure access to this essential commodity.
Although it is important not to overstate the risks, helium supplies could take years to return to prewar levels, and companies -- which already had several months of reserves -- may be underestimating the scale of the problem. Investors should watch helium supplies closely in the medium term, as shortages could hamper vital chip production.
