Key Points
A helium shortage reveals semiconductor supply chains are still vulnerable.
Recycling, redesign, and diversification efforts help, but none solve helium dependence near term.
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The semiconductor industry thought it had fixed its supply chain problem after the early COVID-era chip shortage. It had not. What it had fixed was its exposure to single-fabricator risk. What it hadn't fixed, and what the Strait of Hormuz crisis has now exposed, is its near-total dependence on Qatar for roughly 30% of the global helium supply.
Helium is a byproduct of LNG processing that is used in semiconductor manufacturing. Qatar's Ras Laffan facility -- the world's largest single helium production site -- has been largely offline since early March 2026 following Iranian attacks and an effective blockade of the Strait. Because helium is produced alongside LNG, when LNG tanks fill up and production stops, helium production stops too. When (and if) the Strait reopens, it is expected to take at least two additional months for helium supply to normalize.
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This is not a problem the semiconductor industry can quickly manufacture its way out of.
Image source: Getty Images.
Why there isn't a substitute for helium
Helium's combination of properties makes it irreplaceable for EUV (extreme ultraviolet) lithography, wafer cooling, and mass spectrometry leak detection. No viable alternative exists for these applications.
South Korea, which imported roughly 64% of its helium from Qatar in 2025, is particularly exposed, meaning Samsung and SK Hynix -- the world's largest producers of the high-bandwidth memory (HBM) chips that power Nvidia's (NASDAQ: NVDA) Blackwell GPUs -- face the most direct near-term production risk.
There are three real responses underway, and investors should understand their limits clearly.
Addressing the issue
First is Helium recycling. Most advanced fabrication companies (fabs) now run on-site helium recovery systems from Linde (NASDAQ: LIN), L'Air Liquide (OTC: AIQUF), and Air Products and Chemicals (NYSE: APD) that can recapture 90% to 95% of the helium used in certain processes. The flaw: Leak-detection helium is essentially unrecoverable, and even a 5% loss at high consumption volumes adds up fast. The industry is already running lean.
Second is tool redesign. ASML (NASDAQ: ASML) and Applied Materials (NASDAQ: AMAT) are designing next-generation tools to use less helium in certain processes, substituting nitrogen for non-critical cooling. These are incremental improvements measured in percentage points -- not a structural fix.
Third is supply diversification. New helium projects are under development in Canada, Tanzania (Helium One Global's Rukwa project), and Minnesota (Pulsar Helium's Topaz project). These are years away from meaningful production. Taiwan Semiconductor Manufacturing (NYSE: TSM) reportedly locked in multiyear helium supply contracts as part of its Arizona fab planning.
What this means for investors
Linde is the most direct beneficiary. As the world's largest industrial gas company and a major supplier of on-site helium recovery infrastructure, rising helium prices and growing demand for recycling systems are genuine revenue tailwinds. Air Products and L'Air Liquide sit in a similar position.
TSMC has the greatest near-term buffer among chipmakers thanks to multiyear supply contracts and reported inventory of four to six months. Nvidia appears relatively insulated in the short term, with CEO Jensen Huang publicly downplaying the near-term risk. But if helium constraints slow HBM production at Samsung and SK Hynix, Nvidia's ability to ship Blackwell GPUs -- which require HBM -- becomes a downstream bottleneck.
The structural lesson here is not that AI is in trouble. It is that the industry's supply chain resilience, for all the investment in fab diversification, has a backdoor that runs through a single waterway. The companies that can hedge that exposure -- industrial gas infrastructure providers and software-layer AI companies that consume rather than fabricate chips -- are the ones best positioned, regardless of whether the Strait reopens next month or next year.
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Micah Zimmerman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends ASML, Applied Materials, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool recommends Linde. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
