Trump’s Iran war could make chip shortage worse – Analysts warn
The Iran war isn’t just affecting oil prices; it could harshly impact the semiconductor industry long-term
When Israel and the United States of America attacked Iran, the first thing that analysts focused on was how this would impact the price of oil and natural gas. Iran has the power to effectively close the Strait of Hormuz, preventing shipping through the Strait. This cuts off shipping to and from countries such as Iraq, Kuwait, Qatar, the UAE, and parts of Saudi Arabia. Long-term, this war with Iran could have broader impacts, particularly on the semiconductor industry, which relies on helium and bromine, vital elements in the production of computer chips. Yes, that means that the Iran war could make today’s chip shortage worse.
The world is already feeling the impacts of the war. In Northern Ireland (where I’m from), the price of heating oil has risen by over 85%. For now, the global impacts of changes like this are hard to measure. With fuel costs rising, the cost of electricity, transport, and more will rise. The war has already led to the stock prices of SK Hynix and Samsung declining, as power and material costs will hit their margins. Furthermore, rising power costs may dampen demand for AI datacenters, potentially undermining their long-term profitability.
For now, the war’s impact on the semiconductor industry is small. However, if the war persists, material shortages and rising power costs may have a larger impact. Qatar reportedly produces one-third of the world’s Helium supply, and helium has no viable alternative for semiconductor manufacturing.
A prolonged regional conflict could potentially disrupt chipmakers’ manufacturing operations regarding sourcing materials like Helium and Bromine,
For now, the impact appears to be limited. However, a prolonged conflict could eventually lead to disruptions or require adjustments in the sourcing of key materials.
Ray Wang, memory analyst at SemiAnalysis, to CNBC
In the AI market, higher fuel costs will make energy-intensive AI datacenters even more expensive to operate. This will increase the expenditure AI companies need to operate their AI models and train new ones. With AI companies’ spending already at concerning levels, rising fuel costs will further strain the industry. At present, OpenAI is not profitable, and higher power costs will only make its path to profitability more challenging.
The longer the Iran war continues, the harsher and more widespread its consequences will be.
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