China blocks exports of helium, key for chipmaking, as Iran war squeezes supply

The ongoing closure of the Strait of Hormuz is leading to a global helium shortage. CTV’s Austin Lee has more on the impact in Ottawa.

HONG KONG — China on Friday said it is temporarily blocking the export of helium, a key element for chipmaking, as the Iran war’s escalation adds to global supply disruptions.

China’s commerce ministry and its customs agency said in a brief statement that they are imposing a temporary export ban on helium, effective immediately, in accordance with the relevant provisions of the Foreign Trade Law of the People’s Republic of China.

They did not elaborate further on the reasons.

Helium is crucial for semiconductor manufacturing, and is also used in the medical sector such as in the cooling of MRI machines. Since the Iran war began in late February, global helium supply has been disrupted and prices have gone up substantially.

China only produces about 15 per cent or less of its own helium, importing much of it from Qatar, which generates roughly one-third of the world’s supply, according to estimates cited in a research note by the consultancy Trivium China.

China is looking to protect its industries as global supply of helium has become “very tight,” said Gary Ng, a senior economist at the French bank Natixis.

“Such an export control measure is intended to protect the local industry, especially as it is critical to chipmaking,” he said. It is imposing the measure likely more to secure supply for local usage than for political reasons, Ng said.

The move comes at a time when China is stepping up its self-sufficiency capabilities in chipmaking and artificial intelligence as its technology race with the U.S heats up.

It is not known when global helium supply will return to normal, said Cameron Johnson, a senior partner at Shanghai-based consultancy Tidalwave Solutions.

“The fact that they (China) are now banning exports basically tells me that they know there’s simply not enough helium to do what they need to do,” Johnson said.

However, as China is a relatively small exporter of helium, “the move may not have a significant global impact,” Ng added, although there may still be some pressure on global supply due to the current supply shock.

Chan Ho-him, The Associated Press