- AI is driving the global market with trillions of dollars in investment, but it relies heavily on a chip and energy supply chain spanning over 70 countries.
- Giants like Samsung and SK Hynix account for 80% of HBM memory and nearly 70% of DRAM, while TSMC produces 90% of advanced AI chips.
- East Asia is heavily dependent on Middle Eastern energy, with more than 1/3 of LNG imported from this region, primarily through the Strait of Hormuz.
- About 1/3 of the global helium supply (used for wafer cooling) comes from Qatar, and most of the supply for South Korea and Taiwan also originates here.
- 50% of the global seaborne sulfur passes through Hormuz, along with bromine from the Dead Sea, which are critical materials in chip manufacturing.
- If the war is prolonged, rising energy prices will cause data center operating costs (which account for ~50% of costs) to spike.
- The US expects to spend $650 billion on AI infrastructure, but rising LNG prices could disrupt this plan.
- Chip shipping chains have already been affected; for example, Cathay Pacific, which handles 30% of global wafer transport, faced disruptions in Dubai.
- Current reserves are only temporary: South Korea has about 6 months of helium, while Taiwan has only ~11 days of LNG reserves.
- If the Strait of Hormuz is closed for more than a month, there is a risk of a global recession and a disruption of the post-Covid supply chain.
📌 Conclusion: The Iran war is exposing AI’s greatest weakness: its dependence on Middle Eastern energy and raw materials. With 1/3 of the world’s helium, 50% of its sulfur, and most of its LNG passing through Hormuz, just a few weeks of disruption could halt chip production. In the context of the US spending $650 billion on AI, rising energy costs and broken supply chains could collapse growth expectations and even trigger a global recession.
