The Strait of Hormuz "locks in" helium -- A global chip supply chain crisis is "on the verge of breaking out"

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The blockade of the Strait of Hormuz is quietly turning an energy crisis into a systemic shock to the semiconductor supply chain.

In its latest research report released on March 23, Deutsche Bank warned that interruptions in Qatar’s helium supply are pushing key global chip manufacturing hubs such as South Korea and Japan toward a potential production crisis. Helium spot prices have doubled since the Middle East crisis erupted. No major semiconductor companies have yet reported production disruptions, and South Korean chip manufacturers’ inventories are estimated to last about six months, but this buffer window is rapidly narrowing.

Deutsche Bank strategist Perry Kojodjojo pointed out that Iran’s strike on Qatar’s Ras Laffan Industrial City has caused "widespread destruction," after which Qatar declared force majeure for liquefied natural gas (LNG) and its by-products (including helium), and shipping activities through the Strait of Hormuz have almost come to a halt.

The Deutsche Bank report stressed that if the conflict continues, the Asian tech industry will face a triple shock : economic growth under pressure, narrowing trade surplus, and sell-offs in the stock market. The report believes this also poses significant downside risks to North Asian foreign exchange markets.

Helium: From Party Balloons to Irreplaceable Material in Chip Manufacturing

Helium is commonly associated with festive balloons in popular perception, but its industrial value far exceeds this. According to Deutsche Bank, helium is a key raw material in semiconductor manufacturing, accounting for 21% of global helium demand, and is used for creating ultra-clean, inert environments in chip production. Currently, there is no replaceable alternative.

Global helium supply is highly concentrated. Citing US Semiconductor Industry Association (SIA) data, Deutsche Bank notes that global helium production mainly relies on the US (44%) and Qatar (34%). Due to lack of investment and sanctions, Russia’s contribution in 2025 will drop to approximately 9%. Although the US is the largest producer, most of its output is consumed domestically. This makes Qatar the central hub for helium supplies to Asia’s semiconductor industry.

Asia’s major chip economies are highly dependent on Qatar: 65% of South Korea’s helium imports come from Qatar, and Japan’s ratio is between 28% and 33%.

Ras Laffan Damaged, Supply Recovery Far Off

Deutsche Bank’s report points out that the severity of this crisis lies not only in the supply interruptions themselves but also in the complexity of recovery. Qatar’s Ras Laffan Industrial City is one of the world’s most important helium production bases and has suffered "widespread destruction," meaning that restarting production is not simply a matter of flipping a switch but will require a lengthy reconstruction project.

Meanwhile, even if the Strait of Hormuz reopens, normalization of supply chains will lag significantly behind the end of the conflict. A typical helium shipment from Qatar to Asia takes 30 to 45 days, and supply pipelines are already under strain.

On the demand side, global helium demand was already growing at a rate of 5% to 7% per year. With the expansion of AI-related manufacturing, this growth rate may approach high single digits by 2030. The imbalance of supply and demand is being dramatically amplified by the current crisis.

Triple Shock: Growth, Trade, and Capital Markets

Deutsche Bank’s report quantifies the potential impact of helium supply interruptions on Asian economies from three dimensions:

On the growth front, the electronics industry is the core pillar of South Korea’s economy. In 2025, the electronics industry will account for approximately 60% and 70% of GDP in the two countries, respectively. Meanwhile, global AI spending is expected to reach USD 2.52 trillion in 2026 (a 44% year-on-year increase), with top hyperscale cloud companies allocating a combined AI capital budget of about USD 700 billion, 75% of which is devoted to infrastructure. Should chip supplies be blocked, this massive AI investment plan would be directly impacted, with South Korea bearing the brunt.

On the trade front, electronics on average will account for about 40% of Asian export totals in 2025. Net electronics exports are an important source of trade surplus for South Korea, Malaysia, and Singapore. Deutsche Bank warns that slowed production will compress these surpluses, making relevant economies more vulnerable to global risk shocks and likely to trigger currency depreciation – the 2022 won’s trajectory is a cautionary tale.

On the capital market front, electronics make up about 41% of the MSCI Asia Index, with South Korea and Taiwan having the highest weightings. As of February 2026, foreign ownership in Taiwan is about 47% and in Korea about 34.8%. So far this month, the two markets have seen a combined USD 26 billion in capital outflows. Deutsche Bank believes that if a helium shortage leads to production interruptions, the risk of further foreign capital exiting Asian markets will rise sharply, putting heavy pressure on regional market performance.

The Deutsche Bank report ultimately focuses these risks on the foreign exchange market. Narrowing trade surpluses, sustained capital outflows, and downgraded growth expectations will all exert downward pressure on North Asian currencies such as the won and the New Taiwan dollar. The report characterizes the current helium supply crisis as a “brewing semiconductor shock,” warning that the impact of the Strait of Hormuz blockade should not be limited to the energy sector—its profound ramifications for the global tech supply chain may actually be the long-term risk investors should most beware.

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