Supply disruption from Middle East may further spike chip prices, slow regional data center plans
Published: 05 Mar. 2026, 14:21
![An aerial view of Samsung Electronics' Pyeongtaek chip complex in Gyeonggi [SAMSUNG ELECTRONICS]](https://koreaseafood.online/data/photo/2026/03/05/4bf784a1-69fd-4819-99bf-ceac1760e4f6.jpg)
An aerial view of Samsung Electronics' Pyeongtaek chip complex in Gyeonggi [SAMSUNG ELECTRONICS]
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 result of a spike in energy costs, a ruling party lawmaker said on Thursday.
The chip industry also said the crisis could deal a setback to plans by Big Tech firms to build AI data centers in the Middle East over the longer term, thus impacting semiconductor demand, said Rep. Kim Young-bae of the Democratic Party.
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 the semiconductor supercycle has arrived, but data center plans are highly likely to be disrupted, potentially creating problems with chip demand,” he said at a briefing with reporters.
“Company representatives raised the possibility that semiconductor production could be disrupted if some of these key materials cannot be sourced from the Middle East,” he added.
The industry is worried that the Iran crisis could disrupt supplies of some key chipmaking materials like helium from the Middle East, Kim said.
Helium is essential for heat management during semiconductor production. There are currently no viable alternatives for it in the manufacturing process.
Samsung Electronics declined to comment on the matter.
Korean companies Samsung Electronics and SK hynix have been riding a wave of surging prices for their memory chips, thanks to the global race by tech firms to build AI data centers.
Amazon said on Monday some of its data centers in the United Arab Emirates (UAE) and Bahrain were damaged by drone strikes in the Middle East conflict, sparking questions around Big Tech's pace of expansion in the region.
U.S. tech giants like Microsoft and Nvidia have been positioning the UAE as a regional hub for the artificial intelligence computing needed to power services such as ChatGPT.
Iran fired a barrage of drones and missiles at Gulf States in retaliation for the U.S. and Israeli strikes that killed Supreme Leader Ayatollah Ali Khamenei on Saturday.
Reuters
with the Korea JoongAng Daily
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