SHANGHAI, March 26 (Reuters) - Tightened supply of helium due to the Middle East conflict has started affecting some production in the global tech supply chains, leaving companies scrambling to secure alternative supplies, industry executives said.
Helium is used in several key stages of chipmaking, including cooling, leak detection and precision manufacturing processes, and its prices have soared since the Middle East crisis began.
Supply of helium, a byproduct of natural gas processing, is highly concentrated geographically, with Qatar producing nearly one third of world supply, according to data from the U.S. Geological Survey.
"A helium shortage is an absolute concern,” said Cameron Johnson, senior partner at supply chain consultancy Tidal Wave Solutions, at Semicon China in Shanghai, one of the industry's largest annual gatherings.
He said companies had few immediate options beyond slowing output and prioritising critical products, adding that many were hoping for a quick resolution.
Prolonged shortages could force production cuts and ripple through industries from electronics to automobiles, Johnson added.
"As there’s a shortage, companies might start slowing production or ultimately shutting production down, making chips," he said.
"If that happens, you will see an impact on things like electronics, automobiles, even smartphones."
Jerry Zhang, China sales head at Swiss semiconductor components firm VAT, said the conflict in the Middle East had tightened helium supply and was already affecting production at his and other companies, adding that transport delays were compounding the impact.
The company is seeking alternative sources, including from the United States.
The disruption is also spilling over into broader supply chains linked to the region. Zhou Limin of Mycronic’s MRSI unit said some raw materials sourced from Israel had seen delays, extending delivery times and feeding through to customers as suppliers’ lead times lengthened.
"There has definitely been a short-term impact, and it has already affected us,” Zhou said.
An executive at French industrial gases group Air Liquide also warned on Wednesday of a short-term helium shortage.
Reporting by Eduardo Baptista Editing by Keith Weir
Source: Reuters