South Korea’s semiconductor industry has warned that the escalating crisis involving Iran could disrupt global chip supply chains and slow the expansion of artificial intelligence infrastructure in the Middle East.
Industry officials raised concerns that the conflict could interrupt supplies of critical materials used in semiconductor manufacturing, particularly helium, which is essential for cooling and heat management during chip production. South Korea produces roughly two-thirds of the world’s memory chips, making the country highly sensitive to disruptions in the supply of such materials.
The warning follows meetings between government officials and executives from major chipmakers, including Samsung Electronics and SK Hynix. Lawmaker Kim Young-bae said industry representatives fear that prolonged instability in the Middle East could increase energy costs and create shortages of materials imported from the region.
Beyond supply risks, the conflict may also undermine plans by major technology firms to build new AI-focused data centres across the Middle East. Such facilities are expected to drive strong global demand for advanced semiconductors, meaning delays could weaken a key growth market for the industry.
Some companies have sought to calm market fears. SK Hynix said it has diversified its supply chain and currently holds enough helium inventory, while other semiconductor firms are closely monitoring the situation and preparing contingency plans.
The crisis is also raising broader concerns about the vulnerability of the global chip industry to geopolitical shocks. South Korea depends on the Middle East for multiple materials used in semiconductor manufacturing, and rising oil prices linked to the conflict could further increase production costs.
If the conflict continues, analysts say the effects could ripple through the global technology sector. Disruptions to chipmaking materials may tighten semiconductor supply and push up prices for memory chips and AI hardware.
At the same time, delays in Middle Eastern data-centre construction could slow the rapid expansion of artificial intelligence infrastructure, potentially reducing near-term demand for high-performance chips used in cloud computing and AI training.
Given South Korea’s dominant role in the global semiconductor market, any production disruption in the country could quickly affect technology companies, electronics manufacturers and AI developers worldwide.
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