Middle East Conflict Disrupts Global Chip Supply Chains: European Costs Soar, Deliveries Delayed
A major global logistics firm warns that Middle East conflict has severely disrupted semiconductor supply chains, triggering a potential 10% correction in European manufacturing output. Since hostilities began on February 28, attacks on shipping lanes and airports have crippled freight planning, with global air cargo capacity down 9% and European buyers rapidly depleting backup stock to maintain production.
The war cuts air cargo capacity, raises chip shipping costs, and delays deliveries across Europe
Less cargo space means higher prices and slower deliveries. Razat Gaurav, chief executive of supply chain software company Kinaxis, said that some European chip foundries, automotive manufacturers, and contract manufacturers have already faced delays in semiconductor deliveries.
After that first mention, Razat said customers buying these parts may have stock that lasts anywhere from one week to several months, depending on the business.
Companies are in a better place than they were during the Covid chip shortage. Many supply chains were strengthened after that shock, and more companies built larger inventories.
South Korea’s industry ministry said the country depends a lot on the Middle East for 14 chipmaking items, including bromine and inspection equipment.
The ministry also said South Korea gets about 70% of its oil from the region. If oil prices keep rising, electricity costs at home can rise too. Another weak point is naphtha, as the ministry said 54% of South Korea’s naphtha imports pass through the Strait of Hormuz. If the fighting lasts longer, transport routes could tighten further, and logistics costs could climb again.
War disrupts helium and petrochemical flows as chip stocks fall across Asia
SK Hynix said it has diversified its supply chains and holds enough helium inventory to limit the effect of the Iran conflict.
TSMC and GlobalFoundries said they are closely watching events. GlobalFoundries also said it is staying in direct contact with partners in the region and preparing steps to reduce risk.
Meanwhile, Asian technology stocks fell on Thursday after Iran’s latest attacks on Qatar’s Ras Laffan Industrial City and a jump in oil prices hit investor sentiment.SK Hynix dropped 2.23%.
Samsung Electronics fell 1.8%. Seoul Semiconductor lost 2.53%. In Japan, Advantest fell more than 4%, while Tokyo Electron dropped 1.99%. In Taiwan, TSMC lost 2.1%.
In China, MiniMax fell 10% and Knowledge Atlas Technology, also known as Zhipu, dropped 8% after an earlier rally tied to upbeat comments from Jensen Huang on AI agents and OpenClaw. In Hong Kong, Alibaba fell 3.34%, and Tencent lost 6%.
The raw materials side looks shaky too. Products tied to Middle Eastern energy markets are used in electronics manufacturing, from printed circuit boards to semiconductor process chemicals.
Helium is one of the biggest concerns because it is essential for the semiconductor industry, and Qatar produces more than one-third of the world’s helium as a by-product of natural gas processing.
Beyond helium, wider petrochemical supply lines are also under pressure. The Gulf remains central to hyperscale infrastructure growth, semiconductor manufacturing, and electronics production.
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