Why Iran's Chokehold On Helium Supply Is Threat To AI And MRI

A month into the war in the Middle East, which has affected the global energy supplies, an unlikely shortage of an irreplaceable gas is threatening to halt some major tech and artificial intelligence (AI) productions. Helium, a colourless, odourless, and non-toxic noble gas, is essential for manufacturing the computer chips that power AI tools -- a key driver of global markets and economic growth.

The invisible gas, better known for keeping party balloons aloft, also acts as a cooling agent and is essential for keeping MRI scanners humming. It is a byproduct of natural gas processing and is highly concentrated geographically, with the United States and Qatar being the major producers. 

So when Qatar's Ras Laffan facility-- the world's largest liquefied natural gas plant-- halted production of LNG and "associated products" earlier this month, it also cut off roughly 30 per cent of helium's global supply. Qatar produces nearly one-third of the world's total helium supply, according to data from the US Geological Survey, and the damaged production lines could take years to repair.

Why Helium Is Important 

Helium is the second-most-common element in the universe after hydrogen. But it is rare on Earth, where it mainly exists in small concentrations in pockets of natural gas. During LNG production, the gas is separated from methane, nitrogen and other gases using cryogenic distillation and then shipped as a supercooled liquid.

It is used in several key stages of making computer chips, or semiconductors, including cooling, leak detection and precision manufacturing processes. Chipmakers use it to cool wafers -- the discs of silicon printed with tiny electronic circuits. 

Explaining the process, Jacob Feldgoise, an analyst at Georgetown University's Centre for Security and Emerging Technology, said Helium is used during the etching process, when material that's been deposited on a wafer is scraped away to form transistor structures. 

During the etching process, "you really want to maintain a constant temperature over the wafer. And to do that, you need to be able to draw heat away from the wafer that's being processed," said Feldgoise. "Helium is an excellent thermal conductor. And so chip fabs will blow helium over the back of the wafer to speed heat removal and keep heat removal consistent."

Under current semiconductor manufacturing processes, there's no viable replacement for helium to cool wafers, said Jong-hwan Lee, a professor of semiconductor devices at South Korea's Sangmyung University.

The medical industry also uses helium to cool superconducting magnets powering magnetic resonance imaging machines. It's also used by the space industry to purge rocket fuel tanks, a demand that is expected to grow because of more frequent launches by companies like SpaceX and Blue Origin.

Markets Brace For Shock

The tightened supply of gas has started affecting some production in the global tech supply chains, leaving companies scrambling to secure alternative supplies, industry executives said.

"A helium shortage is an absolute concern," Cameron Johnson, senior partner at supply chain consultancy Tidal Wave Solutions, said at Semicon China in Shanghai, one of the industry's largest annual gatherings.

He said companies had few immediate options beyond slowing output and prioritising critical products, adding that many were hoping for a quick resolution. Prolonged shortages could force production cuts and ripple through industries from electronics and AI to automobiles, Johnson added.

"As there's a shortage, companies might start slowing production or ultimately shutting production down, making chips...If that happens, you will see an impact on things like electronics, automobiles, and even smartphones," he said.

Jerry Zhang, China sales head at Swiss semiconductor components firm VAT, told news agency Reuters that the conflict in the Middle East had tightened helium supply and was already affecting production at his and other companies, adding that transport delays were compounding the impact.

The company is seeking alternative sources, including from the United States-- the largest producer of the gas. 

The Supply Issues

Helium's atomic properties make it tricky to store and transport. In gas form, its tiny molecules can easily escape containers by leaking through even the smallest of gaps.

The noble gas is typically chilled by Qatar's gas company into liquid form and stored in insulated containers for transport through the Strait of Hormuz. The specialised containers can store helium for 35 to 48 days. Any longer and they start warming up, letting the helium transform into gas that escapes through pressure release valves.

With Iran's chokehold on the Hormuz since the start of the war, hundreds of such containers, which reportedly cost about $1 million each, are stuck in the Gulf waters. 

There are only a handful of other countries that produce helium. The United States is the biggest producer, accounting for 81 million cubic meters last year. Qatar, Algeria and Russia are the other major producers, but Russian supplies are banned under United States and European Union sanctions.