Semiconductor manufacturing is critically dependent on helium
Sophisticated semiconductor products can have more than a billion transistors etched onto a silicon chip the size of a fingernail. Achieving this complexity requires multiple steps within the manufacturing line to precisely control processes at the atomic level, on wafers that can reach 30 centimeters in diameter.
Many chemicals and gases are essential to the semiconductor manufacturing process. Helium is one of them due to its cryogenic properties, exceptional thermal conductivity, chemical inertness, small size, and high diffusivity, with no direct substitutes. It is used throughout the entire manufacturing process and is essential for the operation of manufacturing facilities. According to IDTechEx's forecast in its report "Helium for Semiconductors and Beyond 2025-2035: Market, Trends, and Forecasts," the demand for helium in semiconductor manufacturing will more than quintuple by 2035.
For example, within the manufacturing line, helium is essential as a carrier gas for deposition processes, as a diluent in plasma etching, and for wafer cooling to minimize warping under thermal stress. It is essential for extreme ultraviolet (EUV) lithography in the fabrication of sub-5 nm chips, critical for AI applications, and for cooling wafers and tooling. Furthermore, during factory operations, it is also used in leak and safety testing of pipelines and equipment, as well as for creating an ultraclean atmosphere in manufacturing processes.
Why is Qatar so important in the helium trade?
Globally, known helium reserves are primarily located in Qatar, the USA, Algeria, Russia, Canada, and China, with Qatar holding the largest reserves (>10 billion m³). Qatar is a major supplier, along with the USA and Russia, and is the second largest producer, supplying more than a third of the world's helium.
The way helium is produced is also important, as it is generally obtained as a byproduct of natural gas processing, where helium is present in very small quantities (typically between 0.3% and 0.5%, depending on the reserve). Separating helium from natural gas requires a series of processes, including cryogenic separation to separate nitrogen and helium, membrane and pressure swing adsorption (PSA), and subsequent cryogenic liquefaction for transport. All of this requires a large capital investment, so producing helium only makes sense if the facilities process enormous quantities of natural gas. This is why the Ras Laffan plant in Qatar is so important due to its scale of operation.
Qatar and Russia are also key players because both have focused on expanding helium production, and since Qatar's Ras Laffan plant has been affected and shut down, this is already impacting helium prices and supply. Even if the facilities restart now (even partially), there will be a delay, the implications of which will be felt throughout the value chain.
What does this mean for the semiconductor industry?
First, under normal circumstances, helium is a highly perishable gas, with helium storage containers leaking at a rate of approximately 1% per day, according to industry experts. This makes it very difficult to store and maintain a substantial inventory. In fact, it is used for leak testing precisely for this purpose. This means that semiconductor manufacturing plants rely on a stable supply. Supply disruptions can slow production, and significant delays can lead to facility shutdowns in extreme cases.
Factories like TSMC typically maintain several months' worth of stockpiles and utilize helium recycling systems, but whether factories can weather this storm will depend entirely on the duration of the disruptions. If it persists for several months, this will have enormous implications for the semiconductor industry, particularly with the growing demand for increasingly sophisticated chips for AI and HPC that require sub-5nm nodes.
Furthermore, it's also important to consider the regions where the semiconductor manufacturing giants are located. Countries that have diversified their helium supply are also in a stronger position. For example, Taiwan reportedly obtains approximately two-thirds of its helium from Qatar and the United States, with the remainder from other sources. On the other hand, South Korea was reportedly projected to obtain around 65% of its helium from Qatar in 2025, leaving local semiconductor manufacturers vulnerable to supply chain challenges. As a result, companies like Samsung and SK Hynix have reportedly signed long-term supply agreements with companies such as Linde and Air Products, which source a significant portion of their helium from the United States.
Are there alternative ways to obtain helium?
Although helium as a byproduct of natural gas is the primary method of helium production, in countries like the United States and Canada, there are geological zones where reserves can contain helium concentrations ranging from 0.3% to 10%. This opens up opportunities for smaller companies to enter the sector. IDTechEx reports that low-cost separation systems, such as membrane and PSA technologies, can be used to enhance and purify helium obtained from these sources, and that players adopt PSA, membrane, or hybrid PSA + membrane systems depending on the separation objective. Drawing on insights gained through interviews with key technology developers such as Generon and UGS, the IDTechEx report provides a comprehensive market analysis of these technologies, including product comparisons and case studies.
IDTechEx Perspectives
If these challenges persist, we may see greater adoption of helium conservation or recycling measures in semiconductor manufacturing. Indeed, a major success has been the use of helium in magnetic resonance imaging (MRI) scanners, where modern MRI systems have undergone technological improvements and implemented closed-loop systems to recirculate helium and thus avoid the need for refilling.
That said, aside from the current crisis, there have been four significant helium shortages in the last twenty years or so, impacting market availability and helium prices. Therefore, industries critically dependent on helium typically have contingency plans in place, such as diversified supply sources, to protect themselves against short-term disruptions. However, the ability of industries like semiconductor manufacturing to weather the storm will depend entirely on the duration of the disruptions. Persistent market volatility may lead industries to increasingly diversify their helium supply chains to reduce their reliance on any single country, adopting a more balanced approach that includes Qatar, Russia, and the United States.
Author: Dr Shababa Selim, Senior Technology Analyst IDTechEx
