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The effective blockade of the Strait of Hormuz in March 2026, stemming from the U.S.-Iran conflict, has created a significant supply chain crisis for the global semiconductor industry. As a vital chokepoint for essential, non-substitutable raw materials and energy, the disruption threatens to slow chip production, especially for advanced AI and memory components.
Key Impacts on Semiconductor Industry:
Helium Shortage (Critical Bottleneck): Qatar, a major producer, supplies roughly one-third of the world's helium. The conflict has forced a shutdown of Qatar's production and halted shipments, leading to a massive shortage of this crucial gas, which is used for cooling, vacuum, and cleaning in fab processes.
Sulfur and Sulfuric Acid Supply Disruptions: The region provides a large portion of global sulfur, which is processed into sulfuric acid—a key agent used in wafer cleaning and etching. Shortages of this material can directly affect wafer yields.
Aluminum Shortages: The Middle East produces over 8% of the world's aluminum. The crisis has seen key regional producers suspend deliveries, impacting the availability of aluminum for heat sinks and packaging in chip manufacturing.
Energy Costs and Power Stability: Disruptions in LNG shipments affect energy supplies to major Asian hubs, including Taiwan and South Korea, where a majority of the world’s chips are produced. This raises power costs and threatens energy-intensive fab operations.
Logistical Bottlenecks: A large number of specialized helium containers are stuck in or near the Strait of Hormuz, causing severe delays that cannot be immediately remedied.
Many hard drives are He filled. This matters less and less for mainstream since hard drives have been replaced by solid state drives, but for the data centers, they need hard drives. So He shortage could prevent ramping up data centers as quickly as desired. But, so could power shortages.
Due to escalation and miscalculation, this war is becoming increasingly dangerous for the global economy and for lives far beyond the Middle East, including, for example, the impact on Israel’s tech industry.
According to recent Intel quarterly earnings calls, the Intel 7 process node is in high demand, and Intel 7 products are primarily manufactured at Fab 42 in Ocotillo, Arizona; Fab 28 in Kiryat Gat, Israel; and possibly some volume at D1D and D1X in Hillsboro, Oregon. Fab 28 in Israel is critical for maintaining Intel’s revenue and profit. Unfortunately, a semiconductor fab is highly vulnerable to both direct and indirect attacks.
At the moment, most European and US airlines have reduced or suspended their services to Israel altogether. For the airlines still operating, the Israeli government is restricting outbound flights to 100 passengers each. Under these worsening conditions, I suspect many international tech companies will be very hesitant to send employees or contractors into Israel. In fact, some may already be evacuating their staff due to the severity of this conflict.
