Seoul: South Korea's semiconductor industry is increasingly worried that the ongoing crisis in Iran could disrupt the supply chain of vital raw materials from the Middle East, potentially escalating chip prices due to rising energy costs.
According to Thai News Agency, ruling party legislator Kim Yong-bae disclosed these concerns after talks with executives from major companies like Samsung Electronics, alongside various business groups and trade organizations.
Kim highlighted that the chip industry perceives this crisis as a potential threat to long-term strategies for establishing AI data centers by major technology firms in the Middle East, which could, in turn, affect the burgeoning demand for chips. Despite the current upward trend in the semiconductor market, the plans to expand data centers are at risk of being halted, posing future demand challenges.
Officials have also raised alarms about possible disruptions in semiconductor production should the supply of certain critical raw materials, particularly helium, be hindered. Helium is crucial for heat management during manufacturing, and there is no efficient substitute available.
Currently, South Korean giants like Samsung Electronics and SK Hynix are capitalizing on the soaring prices of memory chips as global tech firms strive to construct AI data centers. However, recent developments have cast doubt on the pace of expansion in the region. On Monday, Amazon reported damage to some data centers in the UAE and Bahrain due to drone attacks amid the Middle East conflict.
Major US corporations, including Microsoft and Nvidia, are positioning the UAE as a central hub for artificial intelligence computing. The recent conflict erupted after Iran launched drone and missile attacks on Gulf states in response to US and Israeli actions that resulted in the death of Supreme Leader Ayatollah Ali Khamenei last Saturday.