The Iran war ground through 12 days as uncertainty grew over when it might end, but the damage to global supply chains is already mounting. With the Strait of Hormuz effectively blockaded, helium, aluminium and liquid natural gas (LNG) are all in increasingly short supply, and this bottleneck could hit a wide range of industries, including chip manufacturing and data centres.
For the semiconductor industry, the threat is acute. Qatar produces over a third of the world's helium supply, and drone strikes knocked out QatarEnergy's Ras Laffan complex over a week ago, and it still hasn't come back online. More than 25% of the world's helium supply would be taken off the market by an extended shutdown of the Strait of Hormuz, according to Phil Kornbluth, president of Kornbluth Helium Consulting.
South Korea is among the most exposed countries. Korea relied on Qatar for 64.7 percent of its helium imports last year, and Korean giants such as Samsung and SK Hynix have confirmed that, although they have diversified their supply chains, their current helium stockpiles are expected to last roughly six months. There is no viable alternative to helium, and in 2023, the Semiconductor Industry Association warned that if the supply of helium were to be disrupted, there would likely be shocks to the global semiconductor manufacturing industry.
The timeframe for recovery is concerning. Kornbluth said it "is getting hard to imagine" that the world is not looking at a "minimum" two-to-three month shutdown of helium production and a four-to-six month period before the helium supply chain returns to normal.
Energy costs are another urgent pressure. European LNG prices have already risen by over 60%, and as prices for gas rise, energy prices will, in turn, and that will make running these AI data centres more expensive. One third of China's total LNG use comes from the Strait, and Qatar's Ras Laffan complex alone underpins roughly a fifth of global LNG trade, and when disruptions strike in or around the strait, Asia's gas markets tighten quickly and the world's chipmaking engines begin to look exposed.
Aluminium presents a third supply shock. Aluminium was traded at $3,406.50 per ton as of Monday, up about 8 percent from $3,157.50 on Feb. 27, a day before the United States and Israel launched strikes on Iran, amid growing concerns over supply disruptions following Iran's repeated threats to close the Strait of Hormuz. According to LS Securities analyst Hong Sung-ki, supply disruptions from the Middle East, which accounts for more than 9 percent of global aluminium production, are expected to widen the aluminium supply shortage, and if the closure of the Strait of Hormuz continues, supply disruptions in the aluminium market will likely intensify, leading to a sharp rise in prices.
The outlook hinges on political resolution. With no clear way to open the strait, no timeline for when efforts to do so might even start, and no suggestion that any of the parties involved want to even begin the process, the Strait looks set to be closed for the foreseeable future, and that means global trade disruption will worsen, and associated supply chain problems will mount.
Some manufacturers have hedged their exposure. South Korean memory giant SK hynix has said it had diversified supplies for helium and secured sufficient inventory, and TSMC said that it doesn't currently anticipate a notable impact following Ras Laffan going offline, but that it's monitoring the situation. Yet the broader problem of critical material concentration in a single geopolitical zone remains unsolved.
For Australian organisations and investors, the blockade underscores a dependence on fragile maritime corridors and geopolitical stability that no amount of supply chain diversification can fully insulate. The cost of semiconductors, energy and devices is poised to rise. How long the Strait remains closed will determine whether these shortages become temporary cost pressures or structural shocks to the global technology economy.