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Fitch: Semiconductor Industry Faces Helium Tail Risk
Recommend 23 Positive 52 Negative 36 |
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As the Iran conflict continues to drag on and the issue of Qatar's natural gas supply disruption remains unresolved, the Asian semiconductor supply chain is facing increasing tail risk from the tightening helium supply, rating agency Fitch said. If the supply shortage exceeds inventory buffers, it will lead to higher procurement costs, increased working capital requirements, and adjustments in production priorities, which will in turn exacerbate credit risk. The disruption in Qatar's natural gas supply is leading to a tightening of helium supply, a byproduct of natural gas widely used in semiconductor manufacturing and medical imaging, the report added. Preventive procurement is exacerbating this tightening trend. Since helium is produced during the extraction and liquefaction of natural gas, any disruption in natural gas production could quickly trigger alarms and force buyers to turn to the spot market, where prices and supply conditions may change rapidly. Assuming that the supply shortage lasts too long and depletes buffer inventories, potentially exceeding about six weeks, manufacturers may face stricter quota restrictions, higher procurement costs, increased working capital needs, and greater earnings volatility. In more severe cases, this could force companies to rearrange production plans or prioritize the production of high-value products. Conversely, the supply tightening could also push up chip prices and support the profit margins of large memory chip manufacturers rated by Fitch, thereby limiting rating impacts and building resilience for longer-term supply disruptions. AAStocks Financial News |
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