The closing of Strait of Hormuz because of the conflict with Iran has turned the entire technology industry upside down and energy, beyond all the geopolitical tension that has been dragging on. It is an earthquake that runs through the entire semiconductor supply chainincluding key components that we do not have in mind a priori, but that are essential for the production of all types of microchips. From the most specialized gases to solvents, minerals and, essentially, all critical raw materials that are now much more complicated and expensive to obtain.
Raw material. Apart from silicon, there are other essential raw materials for chip manufacturing that have recently been very difficult to obtain. Just like they count From Bloomberg, the production of these chips requires dozens of materials as specific as ultrapure gases, acids, solvents, resins… Many of which come from a very specific geographic region: the Middle East.
The blockade of the Strait of Hormuz has suddenly cut off the supply of a good part of them, and although large manufacturers such as TSMC and Samsung have some accumulated inventory, the margin is narrowing with each passing week.
Helium has no substitute. Helium is perhaps the most critical material of everyone. It is used to cool wafers during circuit etching, in EUV lithography processes, and to maintain the thermal stability of silicon. It has no substitute. Qatar produced about a third of the world’s supply, but Iranian attacks on its energy facilities in Ras Laffan and Mesaieed have paralyzed virtually all of its production.
According to Bloomberga complete restoration could take up to five years. South Korea imported around 65% of its helium from Qatar, making Samsung and SK Hynix the most vulnerable manufacturers. Memory chips require much more helium than logic chips.
bblunt, sulfuric acid and solvents. Beyond helium, the blockade is also affecting other equally critical materials. High-purity hydrogen bromide gas, essential for etching processes, is in short supply. High-purity sulfuric acid, used to clean wafers and remove photoresists once the circuits are printed, also is facing restrictions.
Just like they explain In The Guardian, the Gulf exports about 45% of the world’s sulfur, the raw material from which it is obtained. And then there are solvents for photoresists, such as PGMEA, which is obtained from naphtha, a crude oil derivative that previously came largely from Iran.
Inventories. The large manufacturers have come out to say that, for the moment, they have enough reserves to last several months. The South Korean government confirmed in April that bromine and helium inventories covered several months of production. TSMC, for its part, said it does not expect an immediate impact, although it warned that the prices of certain gases and chemicals will likely rise.
The problem is that many of these materials have a limited useful life, since they cannot be stored indefinitely. Liquid helium evaporates during transport (especially now that ships must go around Africa), and photoresist solvents expire once opened. Jonathan Colehower, general manager of UST’s Global Operations and Supply Chain department, counted to PC Gamer that companies like Samsung “were operating with very tight inventories” following the just-in-time model, and that “this was not on their radar.”
cgeographical concentration. One of the hardest lessons of this crisis is that the technology supply chain has very specific choke points. And it is not just about the Gulf producing oil; the thing is produces very specific materials in very specific installations that have no easy equivalent elsewhere.
Jenna Ingram, Director of Proactive Intelligence at Exiger, counted told PC Gamer that manufacturers that previously bought helium from the Gulf are now competing for the same limited volume produced by Canada and the United States, which already had their own customers. It should be added that China has just restricted its exports of sulfuric acid and that Russia has imposed temporary controls on helium exports, making the picture even more complicated.
Who will endure and who will not. In this scenario, size matters a lot. The big ones (TSMC, Samsung, SK Hynix) have enough purchasing power to sneak to the front of the queue when there is a shortage, pay premiums for high purity materials and draw on strategic relationships if necessary. The smallest ones, no. According to GartnerIf the situation continues, it could also affect the AI industry.
For consumers, the forecast is not at all hopeful. Supply priorities will most likely favor AI infrastructure over consumer electronics.
How long will this last? “I think at best we are looking at another 12 or 18 months of difficulties. I don’t think this will reset overnight,” explained to the media Derek Lemke, Senior Vice President of Product Intelligence at Exiger. Colehower, for his part, explains that “a good part of the damage is not only an interruption of supply, but damaged infrastructure” that must be rebuilt. And, above all, he emphasizes that “prices are sticky. They go up, but they rarely go down.”
Cover image | Harrison Broadbent
In Xataka | China takes off in quantum computers: it already has the first dual-core and 200 qubits on the planet ready
GIPHY App Key not set. Please check settings