🧠 Food for thought

Implications, context, and why it matters.

The AI boom’s supply-chain vulnerabilities amid the Iran war

• Money keeps flowing into AI, yet parts of its supply chain could get hit by conflict-related disruptions.
• Taiwan, where TSMC (Taiwan Semiconductor Manufacturing Co., the world’s largest contract chipmaker) operates, imports about 97% of its energy, and 37% of the fuel used for its electric grid comes from the Middle East as liquefied natural gas (LNG) 1.
• If deliveries stop, Taiwan holds only 11 days of LNG reserves 1.
• Chip production also relies on helium, which handles heat during semiconductor manufacturing and currently has no workable substitute 2.
• Qatar, Iran’s maritime neighbor, supplies about one-third (about 38%) of global helium, and QatarEnergy (the state-owned energy company) declared force majeure (a legal declaration that allows a company to suspend deliveries due to extraordinary events) after attacks halted gas production and downstream operations 3.

Energy disruptions and rationing in Asia

• Fighting has tightened energy shipments through the Strait of Hormuz, and in 2024 Asia received 84% of the oil and 83% of the LNG that moved through the strait 4.
• Some governments are cutting consumption, with the Philippines moving to a four-day workweek to reduce government energy use and Nepal rationing cooking gas 5.
• Those constraints add pressure on semiconductor makers already dealing with limited supply amid AI-driven demand 2.
• If components run short, manufacturers may favor higher-margin AI chips over lower-profit parts 1.