The Iran war is threatening supply helium. What it means for markets

War in the Middle East could pose a threat to the semiconductor industry and other sectors dependent on the supply of helium produced in the Gulf.

Helium is a little-known but important input in many industries, especially technology. In semiconductor manufacturing, cooling properties are used to transfer heat. Helium is also indispensable in photolithography, a technique used to print the complex circuitry of each chip.

The US Geological Survey estimates that before the war, Qatar produced more than a third of the world’s helium supply. But recently operations at QatarEnergy’s Ras Laffan Industrial City, the world’s largest liquefied natural gas export facility that produces helium as a byproduct, were halted after it was hit by an Iranian drone early in the war. On Wednesday, Iranian missiles paralyzed the facility.

The global helium shortage will impact a number of industries.

“Qatar produces about 30% of the world’s helium, a key input for semiconductors, industrial manufacturing and medical imaging, while some important ingredients for fertilizer production also pass through the Bosphorus,” according to a report by UBS Global Wealth Management’s chief investment office earlier this week. “Any prolonged disruption will affect not only energy prices but also food prices and industrial production.”

Known tight spot

Helium supply has always been a risk. Semiconductor Industry Association in 2023 warned If helium supply is disrupted, “there will likely be shocks to the global semiconductor manufacturing industry.”

SemiAnalytics computer memory analyst Ray Wang told CNBC today that “a protracted regional conflict could potentially disrupt chipmakers’ manufacturing operations related to the supply of materials such as helium and bromine.” “For now, the impact appears limited. However, a prolonged conflict could eventually lead to disruptions or require adjustments to the supply of essential supplies.”

South Korea and Taiwan, the world’s two largest semiconductor manufacturers, are particularly vulnerable to helium supplies in the Middle East.

In 2025, South Korean producers purchased 55% of their helium from countries in the Gulf Cooperation Council, a union of six Arab countries. Taiwan purchased 69% of its helium from the Gulf Cooperation Council in 2024, according to a report by Barclays analysts published on Wednesday.

The virtual closure of the Strait of Hormuz increased helium prices by limiting supply. Bank of America estimated in a note last week that spot helium prices were up as much as 40%, depending on the market. Phil Kornbluth, president of Kornbluth Helium Consulting, told CNBC on Monday that prices have risen 70% to 100% in some cases in just over a week.

Semiconductors are ‘at the top of the hierarchy’

If helium supplies run low, allocations will be determined by how critically needed the gas is.

“Helium demand is concentrated in high-value, mission-critical applications including semiconductors, aerospace, electronics manufacturing and medical imaging,” Bank of America analysts said. “In these end markets, security of supply often takes precedence over price, especially during periods of congestion. This dynamic has historically allowed suppliers to push prices higher as customers move to keep long-term supply stable during outages.”

Semiconductors, considered a critical industry, are “at the top of the acceleration queue,” Kornbluth said. Less vital industries (think party balloons) may experience reduced or no allocations.

Still, Kornbluth said even the semiconductor industry will have a hard time fully recovering from the effects of the helium shortage.

“Everyone will feel it to some degree during the transition period,” he said, adding that even front-row buyers will see price increases. “The industrial gas industry, they’re not going to be hugely favorites there. So, they’re going to do whatever they can to get gas supplies to everyone, or as good a supply as possible, but it comes at a cost.”

length of war

Closing the Strait could knock out about 27 percent of the world’s helium, and any shortages would have delayed effects, Kornbluth said.

“Spot prices are a very small slice of helium sales because it’s mostly a long-term contract business. So while it’s good news, it doesn’t have much impact on the market,” said the consultant, who has been in the business for more than 40 years. “Contract prices haven’t fully changed yet.”

However, this may soon change if a prolonged product shortage puts pressure on suppliers to declare products. force majeure on contract customers.

Perhaps the only saving grace, Kornbluth said, is that the helium market “has been in oversupply for the last two years of this shortage.” Still, it would likely take at least five weeks for production to restart after any ceasefire.

Past oversupply acts as insurance against current shortage. As a result, the likely shortfall in supply today is probably closer to 15% than 30%, Kornbluth said.

If hostilities end “fairly quickly” there will be a ceasefire within a few weeks and [this] “In the past, when we had shortages, people were generally making good money during those periods because the price increase impact across their entire customer base offset the loss of volume from the loss of supply from Qatar. So that’s generally a positive event for the industry,” Kornbluth said.

Manufacturers isolated

Bank of America analysts wrote in a similar tone in their notes that the disruption in Qatar could narrow the helium market, but the length of the conflict and the subsequent recovery are important. Diversification of sourcing and holdings means major industrial gas producers are relatively well insulated from direct supply disruptions, the bank said.

“Helium generally represents a low-to-mid-single-digit percentage of gas companies’ revenues, and so we suspect the Qatar outage is only a neutral to modest net positive event for earnings assuming it continues for several weeks. Longer outages are more accretive to earnings,” Bank of America wrote. “It will take time for the Qatar LNG complex, which will eventually come back into service, to normalize its operations, but we suspect helium inflation will subside quickly.”

Other Wall Street banks, including Deutsche Bank, Wells Fargo and JPMorgan, have pointed to the recently tightening helium market as a positive catalyst for the industrial gas supplier. Linde. Last week, JPMorgan analyst Jeffrey Zekauskas upgraded Linde to a 15% lead through Wednesday in 2026, versus a 3% decline in the S&P 500.

Air Products and ChemicalsThe price of natural gas, another major gas producer, increased by 14% this year. Wells Fargo analyst Michael Sison upgraded the stock to overweight last week and said the Allentown, Pennsylvania-based producer would benefit from rising helium prices.

— CNBC’s Arjun Kharpal and Dylan Butts contributed to this report.