South Korea's chip industry is concerned that the ongoing Middle East conflict, specifically involving Iran, could disrupt the supply of critical materials like helium from the region, potentially hampering semiconductor production. The crisis also threatens to delay or disrupt plans by major tech firms to build AI data centers in the Middle East, which could weaken the strong global demand for chips. These concerns were raised by a South Korean lawmaker following meetings with industry executives from companies like Samsung Electronics.
The main topics covered are the potential disruption to semiconductor supply chains, the risk to AI data center construction plans, and the broader impact of Middle East geopolitical tensions on the global tech industry.
South Korea's chip industry is concerned that a prolonged Iranian crisis will disrupt supplies of key materials from the Middle East and increase chip prices as a âresult of â a spike â in energy costs, a ruling party lawmaker said on Thursday.
The chip industry also said the crisis could âdeal a setback to plans by big tech firms to build AI data centres in the Middle âEast for the longer term, thus weighing on strong chip demand, Kim Young-bae said.
Kim made the comment after meeting with executives from companies such as Samsung Electronics, the world's top memory chipmaker, and business and trade groups.
"We say â the semiconductor âsupercycle has arrived, but data centre plans are highly likely to âbe disrupted, âpotentially creating problems with chip demand," he said at a briefing â with reporters.
"Officials raised a possibility that semiconductor production could be disrupted if âsome of these key materials cannot be sourced from the âMiddle East," he said.
The chip industry is worried that the Iran crisis could disrupt supplies of some key chip-making materials like helium from the Middle East, Kim said.
Helium is essential for heat management during semiconductor production and it has no viable alternatives currently.
Samsung Electronics declined to comment on the matter.
Data centres
South Korean companies Samsung Electronics âand SK Hynix have enjoyed surging prices of memory chips, thanks to the global race by tech firms to build AI data centres.
Amazon said on Monday some of its data â centres in the United Arab Emirates and Bahrain were damaged by drone strikes in the Middle East conflict, sparking questions around Big Tech's pace of expansion in the region.
US tech âgiants like Microsoft and Nvidia have been positioning the UAE as a regional hub for artificial intelligence computing needed to power services such as ChatGPT.
Iran fired a barrage of drones and missiles at Gulf States in retaliation for US and Israeli strikes that killed Supreme Leader Ayatollah Ali Khamenei on Saturday.
The chip industry also said the crisis could âdeal a setback to plans by big tech firms to build AI data centres in the Middle âEast for the longer term, thus weighing on strong chip demand, Kim Young-bae said.
Kim made the comment after meeting with executives from companies such as Samsung Electronics, the world's top memory chipmaker, and business and trade groups.
"We say â the semiconductor âsupercycle has arrived, but data centre plans are highly likely to âbe disrupted, âpotentially creating problems with chip demand," he said at a briefing â with reporters.
"Officials raised a possibility that semiconductor production could be disrupted if âsome of these key materials cannot be sourced from the âMiddle East," he said.
The chip industry is worried that the Iran crisis could disrupt supplies of some key chip-making materials like helium from the Middle East, Kim said.
Helium is essential for heat management during semiconductor production and it has no viable alternatives currently.
Samsung Electronics declined to comment on the matter.
Data centres
South Korean companies Samsung Electronics âand SK Hynix have enjoyed surging prices of memory chips, thanks to the global race by tech firms to build AI data centres.
Amazon said on Monday some of its data â centres in the United Arab Emirates and Bahrain were damaged by drone strikes in the Middle East conflict, sparking questions around Big Tech's pace of expansion in the region.
US tech âgiants like Microsoft and Nvidia have been positioning the UAE as a regional hub for artificial intelligence computing needed to power services such as ChatGPT.
Iran fired a barrage of drones and missiles at Gulf States in retaliation for US and Israeli strikes that killed Supreme Leader Ayatollah Ali Khamenei on Saturday.
Meridiano
