Prolonged Iran conflict could worsen memory crisis

The war in Iran could influence global chip production if it lasts a long time. The situation is causing particular concern in South Korea, home to the two largest memory manufacturers in the world, Samsung and SK Hynix. Due to high demand from AI data centers, a memory crisis is already underway, which particularly affects end customers. However, there should be no significant effects in the short term.

A prolonged conflict could impact supply chains for memory production. The Middle East, for example, is a source of large quantities of helium and bromine. Helium is particularly important in chip manufacturing. Manufacturers use it, for instance, to cool silicon wafers during production, as helium has high thermal conductivity and other suitable properties. Bromine is important for some etching processes.

According to a study by the United States Geological Survey, Qatar is the second-largest global supplier of helium after the United States. In 2025, these two countries accounted for 76 percent of global production. Following Iranian attacks and the threat to shipping routes through the Strait of Hormuz, Qatar has ceased helium production and export.

Alarmed, but not critical

The Reuters news agency reports statements from South Korean politicians warning of prolonged supply stoppages: “Officials pointed to the possibility that semiconductor production could be disrupted if some of these key materials cannot be sourced from the Middle East,” said Kim Young-bae, a member of the South Korean National Assembly, after meetings with, among others, Samsung's leadership. In total, South Korea's chip and memory manufacturers are said to be dependent on over a dozen products from the Middle East.

SK Hynix, at least, sounds all-clear for the short term: the memory manufacturer has “long had diverse supply chains and sufficient reserves” of helium. “Therefore, there are unlikely to be any effects on the company.”

TSMC, the world's largest contract chip manufacturer, also appears relaxed: no significant effects are expected at present. However, the company will continue to monitor the situation closely.

In South Korea, shares of Samsung and SK Hynix fell by almost ten percent at the beginning of the week. The decline has not been quite as drastic so far for the Global Depositary Receipts (GDRs) traded in the West. The entire stock market is currently volatile.

(mma)