The US-Israel war with Iran could disrupt supplies of key semiconductor manufacturing materials, a South Korean ruling party lawmaker said yesterday, as the conflict in the Middle East entered its sixth day.
South Korea’s chip industry, which supplies around two-thirds of global memory chips, is also concerned that a prolonged conflict in Iran will lead to higher energy costs and prices, Kim Young-bae said after meeting with executives from companies such as Samsung Electronics Co and trade groups.
“Officials raised a possibility that semiconductor production could be disrupted if some of these key materials cannot be sourced from the Middle East,” he said at a briefing with reporters, giving helium as one example.
Photo: Reuters
Helium is essential for heat management during semiconductor production and it has no viable alternatives currently. It is only produced in a handful of countries, with Qatar among the leading players in the industry.
The warnings come as chipmakers grapple with severe supply bottlenecks due to surging chip demand from artificial intelligence (AI) data center operators that has tightened supplies to many other industries, including smartphones, laptops and automobiles.
South Korean chipmaker SK Hynix Inc said in a statement that it has “long secured diverse supply chains and sufficient inventory” of helium, “therefore there is almost no chance that the company will be affected.”
Samsung declined to comment.
Taiwan Semiconductor Manufacturing Co (台積電) said in a statement that it does not anticipate any significant impact currently, and will continue monitoring the situation closely.
Contract chipmaker GlobalFoundries Inc said it is “in direct contact with suppliers, customers and partners in the region,” and “mitigation plans” are in place.
South Korean Ministry of Trade, Industry and Resources said the country relies heavily on the Middle East for 14 other items in chip supply chains, including bromine and chip inspection equipment, but that many of them can be sourced domestically or from other markets.
South Korea’s chip industry also warned the crisis could deal a setback to plans by big tech firms to build AI data centers in the Middle East in the longer term, thus weighing on chip demand, Kim said.
US tech giants like Microsoft Corp and Nvidia Corp have been positioning the UAE as a regional hub for AI computing needed to power services such as ChatGPT.
However, Amazon.com Inc said on Monday that some of its data centers in the UAE and Bahrain were damaged by drone strikes, sparking questions around Big Tech’s pace of expansion in the region.
NEW MARKET: The partnership opens up India to the Dutch company, which already has a strong hold in the semiconductor market of South Korea, Taiwan and China ASML Holding NV entered into a partnership agreement with Tata Electronics Pvt Ltd aimed at ramping up India’s goal to develop domestic chip-manufacturing capabilities. The Dutch company’s technology would help power Tata Electronics’ planned 300 millimeter (mm) semiconductor foundry in Gujarat, according to a joint statement from the two companies on Saturday. The signing of a memorandum of understanding coincides with a visit by Indian Prime Minister Narendra Modi to the Netherlands, which is looking to deepen bilateral relations with New Delhi. ASML, whose top customers include Taiwan Semiconductor Manufacturing Co (台積電) and Samsung Electronics Co, makes lithography machines that can print
PORTFOLIO REBALANCING: The adjustments in three global equity indices reflect rising investor appetite for semiconductor and artificial intelligence-related stocks Taiwan’s weighting in major global equity indices compiled by MSCI Inc is to rise modestly following the latest quarterly review, underscoring the market’s expanding role in emerging-market portfolios, as global investors continue to favor the nation’s technology sector. Taiwan’s weighting in the MSCI Emerging Markets Index is to increase by 0.30 percentage points to 23.76 percent, after the changes take effect at the close of the May 29 session. Its weighting in the MSCI All-Country Asia ex-Japan Index is to rise 0.37 percentage points to 27.16 percent, while that in the MSCI All Country World Index is to edge up slightly to
The Hsinchu County Government’s Labor Affairs Department yesterday said that it has received a plan from cosmetics brand Taiwan Shiseido Co (台灣資生堂) detailing mass layoffs at its plant in Hukou Township (湖口). While the labor authorities did not disclose the number of employees to be laid off, Japanese news media earlier in the day reported that the closure of the company’s factory in Hukou would result in 170 employees losing their jobs. Shiseido followed the law by reporting its layoff plan, the department said, adding that authorities would closely monitor negotiations between the management and affected employees and step in if any
Hon Hai Precision Industry Co (鴻海精密) on Tuesday confirmed a cyberattack targeting some of its North American facilities, but said the affected factories were gradually returning to normal. The company, known globally as Foxconn Technology Group (富士康科技集團), said that its cybersecurity team “activated the response mechanism and implemented operational measures to ensure the continuity of production and delivery.” “The affected factories are resuming normal production,” the company said in a statement. Hon Hai had previously described it as a “technical issue,” when news of the cyberattack first surfaced. The confirmation followed media reports of a large-scale information technology system incident that broke out at
RSS