The World Semiconductor Trade Statistics (WSTS) organization releases monthly figures on global chip sales in a report that serves as the sector’s health thermometer. Following the record set in 2025, a year in which sales approached 800 billion dollars, the January 2026 data showed a continuation of the rapid growth pace in the semiconductor market. Global sales in the first month of the year reached 82.5 billion dollars, representing a 3.7% rise from December 2025 and a 46.1% higher total than January 2025.
The growth in sales, driven by demand for AI, also suggested at the start of the year a widening in the capitalization of companies in the sector. Market analysts projected for 2026—with a 50% probability—a central scenario of a 30% growth in the PHI SOX index, representative of the stock market value of the microelectronics industry.
“The crossfire between the two shores of the Persian Gulf threatens to repeat semiconductor shortages in industrial supply chains”
The war between Iran and the United States and Israel threatens the achievement of optimistic forecasts for the semiconductor ecosystem. Just five years after the chip shortage crisis that erupted after the COVID-19 containment lockdowns, the crossfire between the two shores of the Persian Gulf threatens to repeat semiconductor shortages in supply chains, or at least push up production costs. The focus again is on the Far East, where three-quarters of the added value in chip-manufacturing facilities are concentrated —China (27%), Taiwan (18%), South Korea (16%), Japan (15%).
The debate has focused on the rising cost of energy, undoubtedly driven by the high electricity consumption of a microprocessor factory. It is estimated that a single factory has a power draw between 100 and 200 MW, potentially consuming as much as a city with 50,000 inhabitants. The regions leading chip manufacturing have a high dependence on crude oil and liquefied natural gas (LNG) from the conflict zone. In the case of oil, dependence ranges roughly from 50% to 75%. Regarding LNG, dependence is about 10% to 25%.
“The manufacturing lines where weakness is emerging are those in Taiwan and South Korea, while those in Japan and China face lower risk in the medium term”
The percentages of oil and gas dependence cannot be translated directly into the degree of vulnerability for all chip-production chains. Oil barely affects electricity production, and the LNG share in this process must be weighed against the energy mix of each economic region. Finally, resilience to LNG supply shortfalls, estimated by its relative reserves per population, also plays a role. Taking all these factors into account, the manufacturing lines showing greater weakness are the ones in Taiwan and South Korea, while Japan and China face lower risk in the medium term. Expect greater implications for AI chip production than for mature chips used in the automotive industry, healthcare equipment, or defense.
The impact will be greater due to rising costs or shortages of at least three critical chemical components for microprocessor fabrication, which will affect all production lines—including those located in Europe and the United States. In the region where the conflict is unfolding, much of the required raw materials for manufacturing originate currently.
First, high-purity helium, an indispensable element in the semiconductor manufacturing process used to remove residual gas. Qatar is the second-largest helium producer worldwide—only surpassed by the United States—supplying 64% of the helium volume consumed by South Korea and 53% to China. There are other regions whose natural helium reserves remain underexploited—primarily Algeria—yet using these alternative sources would require infrastructure construction and would be costly to preserve quality during transport to Asia with the Strait of Hormuz closed.
Maintaining hydrogen bromide supply would be even more challenging, used for etching silicon wafers. While there are several producers of this acid worldwide, the bromine needed for its production comes from Israel and Jordan at 72.5%. Chlorine-based alternatives to this liquid are more polluting and carry greater handling risks.
“Gulf monarchies, especially the United Arab Emirates, are a premier logistics hub with cross-cutting impact on the flow of all components needed”
The case is similar for the sulfuric acid used to remove impurities from silicon wafers between each manufacturing stage. Although multiple producers of this component exist, the sulfur required to manufacture it is exported 51% from Saudi Arabia, the United Arab Emirates, Oman, Qatar, and Iran. In this case, there is more room to diversify supply sources.
Supply chain problems are not limited to the listed components affected by upstream material-sourcing issues. Gulf monarchies, especially the United Arab Emirates, are a premier logistics hub with a cross-cutting impact on the flow of all components needed for microprocessor fabrication. Up to sixty elements of the periodic table are present in a chip.
At the start of the year, the United States launched the Pax Silica alliance to ensure and strengthen the security and resilience of its semiconductor supply chain. A few days have been enough to render that effort moot and to propagate weakness also to the other side of the silicon curtain. The current microelectronics ecosystem grew and took shape during the post–Cold War period of commercial stability; any disruption to these components affects their efficient operation, translating into inflation across many goods. The Trump administration must urgently learn that armed conflicts and geopolitical instability are the greatest threat to chip availability, and indirectly to economic security and global well-being.
