Helium, key for semiconductor manufacturing and medical equipment, faces shortage | 60 Minutes
In a Nutshell
Iranian attacks on Qatar's Ras Laffan facility have shut down a third of global helium supply, triggering allocation, tripling prices, and creating shortages for semiconductor fabs and MRI labs. U.S. production and new Minnesota discoveries cannot offset the gap quickly because helium requires specialized infrastructure and takes years to bring online. The shortage now threatens chip manufacturing, medical imaging, and defense production, with the U.S. munitions ramp-up directly at risk due to helium-dependent electronics and fiber optics.
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Since the war with Iran broke out, gas prices have spiked more than 50% since January. Helium, another less well-known natural resource, has also been impacted by the conflict. No helium means no new cell phones, laptops, cars, MRI machines, or missiles, as all require this finite and irreplaceable resource. The closing of the Strait of Hormuz in February trapped one-third of the global helium supply. Weeks later, Iranian strikes on Qatar's major gas facility further rattled the supply chain, leaving American industry desperate for answers.
In March, Iranian missiles and drones hit military targets throughout the Middle East, including energy infrastructure. One high-value target attacked was Ras Laffan in Qatar, the world's largest facility for natural gas and its byproduct helium. 7100 miles away at the University of Chicago, Joe Saken was watching closely from his lab.
When Joe Saken heard the news about the attack on the Ras Laffan facility, his first thought was hoping people weren't hurt, then he realized it would create a problem for obtaining helium. Helium is critical for large cylinders in nuclear magnetic resonance machines used by students and for higher stakes research to develop breast cancer drugs, immunotherapies, and treatments for Alzheimer's. Helium is the coldest liquid on Earth, and every couple months Saken uses a long tube to pour 100 L of helium on magnets to stabilize them at 452° below zero F. Once it gets to a critical level, helium must be put back in the magnet to keep it cold, or the magnet breaks, creating huge problems. No other substance can substitute because nothing else boils that low.
Saken's lab contracts with one supplier to deliver the helium needed each month. The University of Chicago supplier placed Saken and colleagues on allocation, essentially rationing, offering only 50% of what was used last year. This forces decisions about which machines to sacrifice and which to try to keep. Fortunately, another supplier was found providing helium on a fairly regular basis, but they can't guarantee supply, making it uncertain whether any will be available in any given week. Last month, Saken received a message that this supplier was about to run out.
One-fifth of the world's helium is consumed by the semiconductor industry alone to make every modern-day electronic from iPhones to pacemakers. Outside Minneapolis, Polar Semiconductors was visited, one of those chip makers. At Polar Semiconductors, workers in round-the-clock shifts manufacture semiconductors for engine systems in cars, the US military, and data centers around the country. Approximately 40-50% of the machines in this factory use helium in some way. Hundreds of steps in the process involve helium, such as machines where helium keeps the environment clean and stable to avoid defects on wafers.
Polar Semiconductors can hedge its helium reserves by relying on three suppliers, but one supplier has put them on allocation. Without helium, the facility would have to shut down completely. The helium crisis is hitting at a time when Polar Semiconductors plans on doubling production capacity to 140 million chips a month. Demand is not going down, with AI data centers growing and electrification increasing demand for semiconductors, meaning demand for helium will continue growing for a long time. Without helium, data centers cannot happen.
Besides Qatar, the United States is the other major producer of helium for the world, with most coming from a single facility in Wyoming. US helium exports are up 70% since the war began and Ras Laffan was hit, mostly to accommodate countries manufacturing semiconductors. However, the US cannot offset the shortage indefinitely. Ramping up production of helium is not easy, even if it can be found.
Four hours north of the Twin Cities, the Topaz Project site of a helium discovery was visited. Cliff Kane is president of the startup exploration company. The wellhead was drilled down around 3,500 ft, hitting a pocket of gas. Kane estimates about a dollar of helium is released every second that valve is open. His company has inserted seven wells around a 100 square mile plot of land. In most cases, including the Ras Laffan facility, helium is a byproduct of the money maker, natural gas extraction. In Minnesota, it's all helium all the time, but finding helium is one thing, and getting it to market even in the best case scenario will take years. This discovery won't help with the current shortage next month.
It's not easy to find helium, it's not easy to build infrastructure, and logistics are hard because helium must be kept at 452 degrees below zero and is perishable, starting to boil off as soon as it's in transit. The complicated supply chain makes helium particularly vulnerable to disruption. The supply is too concentrated, with sources in Qatar, Algeria, Poland, Russia, and a few in the United States. All it takes is a few of those to fall and the whole supply chain comes unraveled.
Rich Brook, a former executive at Heirl, one of the six major international helium suppliers, now an industry consultant, confirms that "opaque" is a fair word to describe the market. It's a very tight-knit business with these six main players responsible for the majority of sales and prices originally. Spot market prices have tripled this year and can go even higher. Countries heavily requiring helium for their semiconductor industries, particularly those based in Korea, Taiwan, and Singapore, immediately started looking towards the US for supply when Qatar went down. There have traditionally only been two qualified sources: Qatar and Exxon in the US.
Helium storage caverns exist, two in the US and one in Germany, underground made of salt and naturally impermeable, ideal for holding excess helium when the market is long. The amount of helium in these caverns is a closely held secret by the owners. When the market was long last year, helium was pumped into the caverns, but now they've reversed direction. Three months from now, supply depends on what happens in the Strait of Hormuz between now and then.
In the aftermath of the Iranian strikes on Ras Laffan in March, the Qataris said it would take at least 3 years to get the facility back in full operation. Satellite imagery analysis by Joe Bermudez at the Center for Strategic and International Studies showed an area where water or firefighting foam dried to make a black stain on the cement, indicating something necessitated the pipes and equipment in that area to be hosed down. The request for comment about the extent of damage to the helium infrastructure specifically went unanswered.
Cliff Kane has briefed policy makers in Washington, telling the Pentagon that there is a single critical point of failure in the system. With Qatar down, that single critical point of failure is coming closer to term. This is especially concerning given that on account of the war with Iran, the US is experiencing a munition shortage, yet the Pentagon has asked some defense contractors to quadruple their production capacities of certain weapons. Modern warfare cannot be made without helium, as fiber optics, munitions, and electronics for missiles and hypersonics all require helium. Without helium, the opportunity to make war becomes even more difficult.
Seven months into the war with no end in sight, nearly two dozen ships have been hit while attempting to pass through the Strait of Hormuz since September, and no ships carrying helium are leaving Qatar.
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