Jan 29, 20232 min
The increasing demand for helium in South Korea has put pressure on local chipmakers, who have already been hit hard by global inflation. Prices of the gas have risen by more than 40 percent in the past two years and are expected to rise another 30% this year.
With the majority of helium used in the region coming from the U.S. and Qatar, the outbreak and unfavourable exchange rates have caused South Korea to rely heavily on imports from these countries. However, with the U.S. halting production and Russia reducing its output due to the Russian-Ukrainian conflict, the shortage of helium is causing stress for chipmakers such as Samsung and SK Hynix.
Helium Import Volume, mmcf (LHS) vs Import Pricing, US$/mcf (RHS)
There has been an increasing stress on South Korean demand with ~35% increase since 2016 (see chart above). Prices have also inched up every year reaching the all time high of US$386/mcf in 2020 with stable prices in the last two years at US$362/mcf.
The bar chart also indicates an exodus of volumes from US to Qatar (which has dominated the Asian market in the last 2 years). Although with the US BLM production picking up pace in the latter half of 2022, and South Korea's rising demand, we might see an increase in US imports to South Korea in 2023.
Article:
Helium for chip production is on the rise in the South Korean region, according to TheElec. This is expected to put pressure on local chipmakers, who have already been hit hard by global inflation.
Helium prices have risen since the outbreak, increasing by more than 40 percent from 2020 to 2022.
Further price increases of 30 percent are expected this year for suppliers Linde, Air Products and Air Liquide, the sources said.
Helium is used as a coolant in wafer manufacturing and display panel production.
More than 60 percent of the helium used in Korea is consumed by chipmakers Samsung and SK Hynix. Its rising price, combined with unfavorable exchange rates, has increased the cost of sourcing the gas for these two chipmakers.
The U.S. and Qatar account for more than 70 percent of global helium production, but many companies in the U.S. shut down operations during the outbreak.
South Korean companies had relied heavily on helium imports from the U.S. In 2020, South Korea imported 1,133 tons of the gas from the U.S., but that dropped to 680 tons in 2021 and 565 tons in 2022.
Russia, another producer of the gas, is now also reducing the production of the gas due to the Russian-Ukrainian conflict.