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Middle East Conflict Strains Semiconductor Supply Chains, Pushes Up Costs

Major chipmakers are grappling with supply chain disruptions and rising operational expenses stemming from the Iran war, threatening profitability across the sector. TSMC, which manufactures chips for Nvidia, warned that chemical and gas prices will likely climb. Foxconn, the world's largest contract electronics manufacturer, identified Middle East developments as a key challenge. Infineon cited mounting costs for precious metals, energy and freight. Helium shortages pose particular concern, as Qatar—responsible for over 30% of global supply—has faced export capacity constraints from Iranian strikes. Access to bromine and aluminum has also suffered. Analysts warn conditions will persist beyond any potential ceasefire, as supply-side damage takes quarters to reverse. Gas, energy and freight costs remain near record levels.