Semiconductor firms in Malaysia are closely monitoring risks stemming from disruptions to helium supplies due to the conflict in the Middle East. The situation, triggered by the disruption of natural gas processing in Qatar following the U.S.-Israel conflict with Iran, has led to a significant increase in helium prices. Helium, crucial for industries such as semiconductors and medical imaging, is a byproduct of LNG processing, and any reduction in output is anticipated to impact global supplies.
According to Wong Siew Hai, the president of the Malaysia Semiconductor Industry Association, while the heightened awareness has prompted increased risk monitoring, there have been no reported operational interruptions for Malaysian semiconductor operations. Most chipmakers worldwide, including those in Malaysia, maintain inventories and diverse sourcing strategies to mitigate immediate risks.
Malaysian companies primarily focused on packaging, testing, and assembly are less vulnerable to helium supply disruptions and can predominantly function using nitrogen as an alternative. With Malaysia hosting suppliers and factories catering to semiconductor giants like Intel Corp and Europe’s Infineon and STMicroelectronics, the country plays a significant role in global semiconductor trade and assembly.
Fitch Ratings highlighted the escalating risks faced by Asia’s semiconductor supply chain due to helium supply strains as the conflict in Iran continues. The credit risk is expected to worsen if the shortages persist beyond inventory buffers.
Source: Tech-Economic Times