The helium crisis besets the chip and semiconductor industry

Theo CBSthe global helium supply is facing a seven-month shortage following Iran’s attacks on Qatar gas facilities and the closure of the Strait of Hormuz. Many high-end industries such as semiconductors and AI chips are directly affected by this never-ending war.

As a finite and irreplaceable natural resource, helium plays an essential role in magnetic resonance imaging (MRI), aerospace, automobiles, smartphones, and microchip production for artificial intelligence.

Cliff Cain, president of Pulsar Helium company in Minnesota, USA, emphasized that helium is difficult to exploit and transport. According to Alternative Assetshelium is a special gas that needs to be transported in liquid form, requiring specialized tanks maintained at -269°C. However, even under these conditions, the tank can only hold helium for about 45 days before it evaporates. Helium distribution is complex and only a handful of companies are capable of doing it. About two-thirds of distribution is controlled by three major companies: Linde, Air Liquide and Air Products.

In both production and distribution, even a small incident at one company can have global consequences. For decades, Cain has worked to warn of complex supply chains that are vulnerable to disruption, with helium supplies concentrated in too few locations: Algeria, Poland, Russia, Qatar and the United States, with the majority coming from the latter two countries. “If just a few of them collapse, the whole supply chain will be broken,” he said.

The fluctuations staggered helium supplies

The closure of the Strait of Hormuz in February left one-third of the global helium supply stranded in the Persian Gulf. Then, Ras Laffan, the all-helium production facility in Qatar, was targeted by Iranian airstrikes in March, further shaking the supply chain.

Ras Laffan is the world’s largest natural gas facility with helium as a byproduct. After the attack, Qatar said it would take at least 3 years to bring the facility back to full operation. Ras Laffan has not disclosed the extent of damage to helium production infrastructure.

Qatar is the world’s second largest commercial helium producer after the United States. The Wyoming Energy Authority says most of the U.S. helium comes from a single facility in the state. Export data from the Census Bureau shows that U.S. helium exports have increased 70 percent since the war began.

However, the US cannot make up the shortfall forever. The longer the war with Iran lasts, the more strained the global helium supply chain becomes. According to Rich Brooke, former CEO of Air Liquide, one of the six major helium suppliers in the international market, the spot price of helium has tripled since then.

Impact on the semiconductor and AI chip industries

Helium is important for many electronic devices. The Compressed Air Association says the semiconductor industry consumes about one-fifth of the world’s helium.

Semiconductor company Polar Semiconductors in the suburbs of Minneapolis, Minnesota, produces chips for car engine systems, servers in data centers and the US military. Surya Iyer, president and CEO of Polar Semiconductors, shared that about 40-50% of the machines in the factory, the ultra-clean area used for semiconductor production, use helium. Hundreds of steps in the production process involve this gas. Without it, everything would stop working. The helium crisis comes at a time when Polar is planning to double its production capacity to about 140 million chips per month.

Theo Scientific Americanthe semiconductor industry has become the largest consumer of helium, surpassing MRI machines in recent years. Chipmakers try to maintain reserves of helium, but the gas is notoriously difficult to store. “Helium can leak about 0.1-1% per month, depending on gasket quality,” said Lita Shon-Roy, president and CEO of semiconductor materials consulting firm TECHCET. “It always leaks over time.”

If the war continues, the first areas affected will be places that depend on Qatar such as Japan, Singapore, South Korea and Taiwan – where a series of the world’s most advanced chip manufacturing facilities are concentrated.

In chip manufacturing, the factory mainly uses helium in the etching stage, which selectively removes material to create details on the chip. An advanced AI chip can contain tens of billions of transistors, so the process requires extreme precision. The etching process can be performed hundreds of times per wafer and requires precise temperature control, explains Mike Corbett, managing partner and co-founder of consulting firm Linx Consulting. To maintain stability, the factory injects helium gas onto the back of the wafer to expel heat. The special ability to conduct heat makes helium a valuable gas in chip production. Because helium allows more wafers to be processed per hour, it is difficult to replace it with cheaper gases such as argon or nitrogen.

The chip factory also strictly controls the quality of all materials coming into the facility. They need helium to meet strict standards, so it’s not easy to change suppliers. While some manufacturing industries have developed closed-loop recycling systems that capture and reuse helium after it has gone through the process, Corbett said it is not being reused in chip manufacturing. Until now, semiconductor chip factories have rarely invested in pipeline systems and machinery to recover helium gas because this gas has always been considered cheap enough to just be discharged straight out.