Indians Rush to Buy Induction Cookers, South Korean Chips Face Bottlenecks, How Big Is the Impact of Qatar's LNG Supply Cuts

What are the potential impacts of the helium gas shortage caused by AI on the global semiconductor supply chain?

The conflict in the Middle East has escalated, further impacting global energy security.

Qatar Energy estimates that the damage caused by Iranian missile attacks on Ras Laffan Industrial City over the past two days may take up to five years to repair.

The company announced a force majeure for long-term liquefied natural gas (LNG) contracts supplied to Italy, Belgium, South Korea, and China, which legally exempts them from obligations.

Qatar has proven natural gas reserves of approximately 25.5 trillion cubic meters, second only to Russia and Iran. The Strait of Hormuz handles about 20% of the world’s LNG maritime trade and is the only sea route for Qatar’s LNG exports.

The company accounts for about 20% of global LNG supply, with exports mainly going to Asia (about 80%) and Europe (about 20%).

In retaliation for attacks on domestic energy infrastructure by the U.S. and Israel, the Islamic Revolutionary Guard Corps launched a fierce operation in the early hours of March 19, targeting five oil and gas facilities in Saudi Arabia, the UAE, and Qatar.

Among them, Qatar’s Ras Laffan Industrial City was hit by five ballistic missiles. This industrial city is home to the world’s largest LNG production facilities. U.S. energy giant ExxonMobil is directly involved in the liquefaction and export operations at Ras Laffan.

The attack damaged two LNG production units (Units 4 and 6), with a combined annual capacity of 12.8 million tons, accounting for about 17% of Qatar’s total exports.

LNG has significantly lower carbon emissions compared to other traditional energy sources and is widely used in residential and industrial sectors.

Due to its stability in supply, deep industrial dependence, and the gradual energy transition worldwide, fossil fuels like natural gas remain the “ballast” supporting modern civilization. Any disruption or sharp price fluctuations could pose severe challenges to societal systems.

Europe and Asia, with their large populations, are especially sensitive. Since the outbreak of the Russia-Ukraine conflict in February 2022, Europe has significantly reduced pipeline gas imports from Russia, turning to LNG as the main alternative.

On March 2, during the early stages of the war, European natural gas prices surged by 50% after Qatar’s LNG production was interrupted. April LNG futures prices in Europe rose over 30% after opening on March 19, exceeding 70 euros per megawatt-hour, more than doubling the pre-conflict levels.

Analysts say buyers in Asia and Europe are competing for limited spot LNG, with U.S. LNG shipments originally destined for Europe rerouted to Asia, where higher premiums are paid.

The impact of LNG supply disruptions is far-reaching, affecting everything from Indian dining tables to South Korean chip manufacturers.

Public data shows that about half of India’s LNG depends on imports, mostly transported through the Strait of Hormuz.

According to China Energy News, the Indian government has ordered priority to ensure household gas supplies while reducing industrial sales. Citizens and businesses are turning to electric stoves as alternatives. Sales of induction cookers on Amazon India have increased over 30 times, while rice cookers and electric pressure cookers have grown fourfold.

Additionally, helium produced as a byproduct during LNG processing can be highly purified for use in advanced processes such as cooling lithography machines, wafer etching and cleaning, and precise temperature control.

This critical raw material for Asia’s chip industry is likely to face supply shocks, further threatening about half of the world’s semiconductor capacity.

Liquid helium has a shelf life of only about 45 days; if supply is cut off for more than four weeks, the global supply chain could undergo systemic restructuring. 64.7% of helium in South Korea comes from Qatar. Samsung Electronics and SK Hynix have urgently checked their inventories.

Due to the energy crisis, the South Korean government is also considering vehicle restrictions to reduce energy consumption.

However, rising prices for traditional energy sources could accelerate the transition to cleaner energy. For example, a BYD car dealership in Manila’s financial district in the Philippines received a month’s worth of orders in the past two weeks. A VinFast showroom in Hanoi, Vietnam, saw customer visits triple.