Wed, Mar 18, 2026 page2

• Middle East war threatens Taiwan chip industry: Bloomberg

  • By Sam Garcia / Staff writer, with CNA
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  Taiwan has secured more than half of its liquefied natural gas (LNG) needs for May and crude oil supply through April, ensuring a steady power supply to support its semiconductor industry, which is threatened as the war in the Middle East stretches into a third week, Bloomberg News reported on Monday.

  The conflict could “choke off key supplies vital for chipmaking and spike the cost of power in Taiwan,” said the report, titled “Iran War Chokepoints Begin to Cast Doubt on Global Chip Supply.”

  Taiwan’s semiconductor industry depends on chemicals, components, machinery and other materials from abroad, including helium and sulfur, Bloomberg said.

  

  A technician inspects a silicon wafer at a semiconductor laboratory in Hsinchu on Sept. 11, 2022.

  Photo: CNA

  Any interruptions to the nation’s helium, one-third of which is processed in Qatar, sulfur, which is made through oil and gas refining, or electrical grid, which draws one-third of its fuel from the Middle East, would affect Taiwan Semiconductor Manufacturing Co, it said.

  “A disruption in the Strait of Hormuz wouldn’t automatically halt chip production, but it could ripple through power costs, materials supply, and the economics of building AI infrastructure,” Shawn Kim, head of Asia technology research at Morgan Stanley, told Bloomberg.

  Taiwan relies heavily on imports for its fuel, and its LNG reserves are only sufficient for 11 days, leaving it “especially vulnerable to supply disruptions,” Bloomberg said.

  In comparison, South Korea can store at least 52 days of LNG and Japan holds about three weeks of stockpiles, it said.

  Taiwan has another few weeks of inventory arriving on ships, it added, citing Morgan Stanley.

  “Taiwan has a 97 percent dependence on foreign imports for its energy needs” and about 37 percent of its LNG comes from the Middle East, according to a Goldman Sachs report published on Sunday last week, Bloomberg said, adding that Taiwan could pay much more for replacement cargoes.

  “Commercial transit through the Strait of Hormuz remains severely disrupted, and Qatar has declared force majeure. For Taiwan, the key risk channel is not only oil prices, but physical gas availability, pricing, and delivery timing,” Goldman Sachs analysts told Bloomberg.

  Taiwan has filled the gap left by 22 scheduled LNG shipments from Qatar for this month and next month, ensuring that domestic gas and power supplies remain secure, the Ministry of Economic Affairs said on Saturday last week.

  Helium can be obtained through international suppliers and alternative source countries, including Australia and the US, so supply would not be affected by the situation in any single region, the Industrial Development Association said on Thursday last week.

  Taiwan plans to lift the statutory minimum natural gas inventory from 11 days to 14 days starting next year, and would review that rule in future, Energy Administration Deputy Director-General Chen Chung-hsien (陳崇憲) told Bloomberg.

  The nation has secured more than half of its LNG needs for May and has started negotiations with the US for its June supply, Chen said.

  It also secured crude oil for this month and next month, and is working on May shipments, he added.

  “Semiconductors is Taiwan’s strategic industry, we will make sure that the power supply to chip plants is stable,” he told Bloomberg.

  “If the disruption is sustained over an extended period, helium shortages could force chipmakers to prioritize production of higher-margin AI [artificial intelligence] chips over less profitable components,” Bloomberg Economics analyst Michael Deng said.
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