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The Ongoing Strait of Hormuz Blockage Will Impact the Semiconductor and AI Industries With Aluminum
EDITORS: THIS HAS BEEN PRODUCED BY SOFTWARE UNDER DEVELOPMENT - THE CONTENT MAY REQUIRE EXTENSIVE EDITING
And with Iran now confirmed to have released sea mines into the Strait, its closure looks set to continue for a few more weeks, posing a grave threat to many global industries and the global economy in turn.
But the Strait isn't just a transit route for oil tankers; some 11% of global seaborne trade by volume passes through it each year. Ships that transit the waterway are responsible for 20% of the global LNG market - the same gas that powers much of the world's energy infrastructure.
The Middle East is one of the world's largest exporters of refined aluminum, importing the unwrought material before processing and shipping it out. The Middle East is responsible for around 9% of global aluminum smelting capacity, states Reuters. [reuters.com] And some regional suppliers have announced incoming shortages. Others have simply shut down refineries while the conflict is ongoing, but they will be hard to start back up again.
Copper is also impacted [fastmarkets.com], partly because it flowed through the Strait and partly because Iran was a major producer. Copper was already in short supply [tomshardware.com] because of explosive demand following the AI data center buildout announcements made in 2025.
The helium supply has been impacted by the war as well. Drone strikes knocked out QatarEnergy's Ras Laffan complex [tomshardware.com] over a week ago, and it still hasn't come back online. Sherwood reports [sherwood.news] that Qatar alone is responsible for around 30% of global helium production, as a byproduct of its LNG production. With that supply no longer getting out, producers are shutting down their wells, which in turn cuts out helium supply lines.
And to top it all off, even shipping containers are in short supply. As ships get stuck waiting at the Strait for a chance to transit, they're not reaching their destinations and unloading their containers. The just-in-time nature of the global shipping industry means those containers now aren't available to ship something else back the other way, causing further disruption.
Although some materials are a little harder to quantify, their impact is no less dramatic. And they could have an outsized impact on the chip and AI data center industries.
LNG is used to produce energy via gas turbines [tomshardware.com], and is of major import for powering industries in Asia, including China and Taiwan. But it's also been used heavily to run new AI data centers [tomshardware.com]such as those run by xAI and OpenAI. CNBC reports [redirectingat.com] that European LNG prices have already risen by over 60%. As prices for gas rise, energy prices will, in turn, and that will make running these AI data centers more expensive.
Helium is incredibly important for chip production [tomshardware.com]. As a chemically inert gas, Helium is used as a blanket and purge gas when producing silicon wafers. Its high thermal conductivity makes it a useful coolant when liquified, too. It's important for manufacturing the chips, as well. If the shortage lasts more than two weeks, then it could pose significant challenges.
South Korean firms like Samsung and SK hynix are said to be closely monitoring the situation, as any long-term disruption could impact the supply of memory. That's about the last thing the already-constrained industry [tomshardware.com] needs. TSMC in Taiwan could also be impacted, although some Taiwanese companies claim to hold years worth of Helium in reserve [reuters.com].
If you have been holding out to upgrade something when prices for memory or anything else besides might return to normal, you might be waiting a very long time.
