Helium Supply Crisis Poses 'Tail Risk' to Semiconductor Industry

In the early 1920s, experimental dives by the USS Falcon confirmed that helium-oxygen gas mixtures reduced respiratory strain on divers. Side effects emerged as well. Inhaling the gas raised voices to high pitches, creating communication difficulties. The so-called "Donald Duck effect" of helium gas, commonly seen on TV entertainment shows, is essentially a byproduct of U.S. defense research. Recognizing the importance of helium, which is lighter than air and has high thermal conductivity, the United States enacted legislation in 1925 designating helium as a strategic material. During World War II, American helium airships played vital roles escorting naval vessels and detecting submarines.

In 1868, French scientist Pierre Janssen first observed a yellow wavelength on the sun's surface. The newly discovered element was named "helium" after the Greek word Helios, meaning sun. Today, helium is a critical resource in medical and scientific technology fields. From medical research using magnetic resonance imaging (MRI) to electric vehicles, quantum computing, and aerospace industries, none can function without helium, which maintains its liquid state at extremely low temperatures. In the semiconductor industry, helium is also essential for processes such as wafer cooling. The problem is that while helium is abundant throughout the universe, it is extremely rare on Earth. Demand is surging, yet production is limited to a few countries including the United States and Qatar. This is why the world has suffered four helium shortages since 2006.

Earlier this month, Iranian missiles struck Ras Laffan, Qatar's liquefied natural gas (LNG) production hub. This halted operations at helium extraction facilities that produce the gas as a byproduct of natural gas processing. The collapse of Qatar's supply chain, which accounts for more than 30% of global production, represents a critical variable for the semiconductor industry. Global credit rating agency Fitch warned on the 18th of "tail risk" to semiconductor supply chains from the helium shortage. Tail risk refers to events that have low probability of occurring but cause enormous impact when they do materialize. South Korea, which depends on Qatar for approximately 65% of its helium imports, was identified as the country most vulnerable to this risk. We live in an era of heightened global uncertainty and persistent supply chain crises. Fundamental measures to establish resource security appear urgently needed.