Hostilities in the Middle East pose a threat to the semiconductor industry and other sectors dependent on a resource produced in the Gulf region: helium. Although not widely recognized, helium is a critical raw material for numerous industries, particularly in technology. In semiconductor manufacturing, its cooling properties are utilized for heat transfer, and it is also indispensable in lithography, the core technology for printing intricate circuits onto chips.

According to U.S. Geological Survey estimates, Qatar accounted for over one-third of global helium supply prior to the conflict. However, production has been halted at Ras Laffan Industrial City, operated by QatarEnergy—the world's largest liquefied natural gas export hub, which also yields helium as a byproduct—following an initial attack by Iranian drones and a subsequent missile strike that significantly damaged the facility on Wednesday.

A global helium shortage would impact multiple industries. A report from UBS Global Wealth Management's Chief Investment Office earlier this week stated, "Qatar's helium production constitutes about 30% of the global total, serving as a key input for semiconductors, industrial manufacturing, and medical imaging; several critical inputs for fertilizer production also transit the Strait of Hormuz. Any prolonged disruption would affect not only energy prices but also food prices and industrial production."

The supply of helium was already at risk. In 2023, the U.S. Semiconductor Industry Association warned that a helium supply disruption could impact global semiconductor manufacturing. Ray Wang, a memory analyst at semiconductor industry analysis firm SemiAnalysis, told CNBC, "Currently, a protracted regional conflict could disrupt chipmakers' operations by affecting access to raw materials like helium and bromine. The impact is limited for now, but prolonged conflict could ultimately lead to supply disruptions or force companies to alter their sourcing strategies for critical inputs."

South Korea and Taiwan, China, the world's two largest semiconductor-producing regions, are particularly reliant on Middle Eastern helium supplies. A Barclays analyst report from Wednesday indicated that in 2025, 55% of South Korean manufacturers' helium procurement will come from the six Gulf Cooperation Council nations; for Taiwan, China, the figure reaches 69% in 2024.

With the Strait of Hormuz effectively blocked, constrained helium supply is driving prices sharply higher. A Bank of America research report last week estimated spot helium price increases of up to 40%, depending on the market. Phil Kornbluth, President of Kornbluth Helium Consulting, said on Monday that prices in some markets had already surged 70% to 100% in just over a week.

If a helium shortage occurs, allocation will be based on the criticality of demand. Bank of America analysts noted, "Helium demand is concentrated in high-value, mission-critical areas including semiconductors, aerospace, electronics manufacturing, and medical imaging. In these end markets, supply security typically takes precedence over price, especially during tight supply periods. In such a scenario, customers scramble to secure long-term supply, and suppliers have historically been able to raise prices."

Kornbluth stated that the semiconductor industry, deemed critical, would be at the top of the priority allocation list, while non-essential uses like party balloons could face significant supply cuts or complete unavailability. However, he added that even the semiconductor industry would not be entirely immune to the effects of a shortage. "All industries will be affected to some degree during a transition period," he said, noting that even priority buyers would face higher prices. "Industrial gas companies won't heavily favor one side over another. They will try to supply everyone and maintain deliveries as much as possible, but it will come at a price."

The duration of the conflict is a critical factor. Kornbluth said a blockade of the Strait of Hormuz could idle approximately 27% of global helium production capacity, and any shortage would have a lagged effect. "Spot sales represent a very small fraction of the helium market; the vast majority is under long-term contract. So, even if spot price increases make headlines, their practical market impact is limited. Contract prices haven't really moved yet," explained the consultant, who has over 40 years of experience. This could change quickly if prolonged shortages force suppliers to declare force majeure on contract customers.

A potential silver lining, according to Kornbluth, is that the helium market was oversupplied for two consecutive years prior to this shortage. Even if a ceasefire is reached, restarting production at the Qatari facilities would take at least five weeks. Excess inventory built up during the prior glut can buffer the current shortage, meaning the actual supply gap is closer to 15% rather than 30%. "If the conflict ends soon—a ceasefire within weeks, leading to a total disruption cycle of about four months—this would likely be just a significant blip in an oversupply cycle. During past shortages, industry players often saw strong profits, as price increases across their entire customer base more than offset volume losses from the absence of Qatari supply. This is generally positive for the industry," he said.

Bank of America analysts share a similar view, stating that while the disruption of Qatari supply tightens the helium market, the conflict's duration and subsequent recovery are key. Diversified sourcing and existing inventories mean large industrial gas producers are relatively insulated from direct supply shocks. "Helium typically constitutes only a few percentage points of gas companies' revenue. Therefore, we believe a few weeks of Qatari outage would be neutral to slightly positive for earnings; the longer the outage lasts, the greater the upside potential," Bank of America wrote. "Restarting Qatari LNG facilities will take some time, but we expect helium price increases to ease relatively quickly."

Wall Street firms including Deutsche Bank, Wells Fargo, and J.P. Morgan have recently highlighted that tightening helium markets serve as a positive catalyst for industrial gas supplier Linde PLC (LIN). Last week, J.P. Morgan analyst Jeffrey Zekauskas upgraded his rating on Linde PLC (LIN); as of Wednesday, the company's 2026 stock price had increased by 15%, compared to a 3% decline in the S&P 500 index over the same period. Shares of another major producer, Air Products & Chemicals (APD), have risen 14% year-to-date. Wells Fargo analyst Michael Sison upgraded the stock to Overweight last week, stating that the Allentown, Pennsylvania-based company stands to benefit significantly from helium price increases.