China halts helium exports as Middle East conflict threatens AI chip manufacturing supply chains

China Temporarily Bans Helium Exports to Prevent Domestic Shortages

China announced on Friday an immediate temporary export ban on helium, marking the latest effort by Beijing to prevent domestic shortages of critical materials as renewed military conflict in the Middle East threatens global supply chains 1

1

. The decision comes as US-Iran tensions have flared again, with earlier hostilities this year already causing helium shortages that disrupted companies globally, including those in China where the AI industry increasingly relies on domestic chips for training and running AI models .

The helium ban follows similar measures Beijing has imposed on fuel, fertilizers, and sulphuric acid as the country seeks to secure critical resources for its expanding AI chip manufacturing sector 1

1

. China is also working to boost domestic chip manufacturing capacity and reduce dependence on cutting-edge Nvidia semiconductors that fall under US export controls.

Global Helium Supplies Face Additional Pressure Despite China's Limited Production

While China ranked sixth in global helium production as of March 2026 with three million cubic meters for a 1.6% market share, the export ban could still squeeze global helium supplies further 2

2

. Chinese companies have increasingly acted as intermediaries, importing Russian helium and re-exporting volumes to overseas markets, including Europe 1

1

.

Analysts estimate China imports around 85% or more of its helium requirements, with Qatar accounting for a major share of global helium output and supplying more than half of China's imports in recent years . Data from the US Geological Survey shows the US leads global production with 81 million cubic meters, followed by Qatar and Russia 2

2

.

Critical Role of Helium in Semiconductor Manufacturing and AI Hardware

Helium plays an essential role in semiconductor fabrication, used for wafer cooling, plasma etching, chemical vapor deposition, atomic layer deposition, lithography support, and leak detection 1

1

. The gas also performs the critical function of cooling advanced extreme ultraviolet lithography (EUV) machines in the first stage of the manufacturing process 2

2

.

Helium is extracted from natural gas fields with unusually high helium concentrations and cannot be quickly manufactured from other industrial processes, making supply chain bottlenecks particularly concerning . A disruption in the helium market could have serious implications for chip production at a time when demand is already high due to the multi-billion-dollar artificial intelligence buildout.

Intel CEO Warned About Helium Supply Chain Risks

Intel CEO Lip-Bu Tan had already flagged potential helium disruptions earlier this year. Speaking in a podcast in June, Tan discussed supply chain bottlenecks affecting the semiconductor industry: "And I think couple of bottlenecks for the AI demand and growth. One of course is everybody knows power constraint. Some country the power they just don't have that...and then secondly, a lot of people didn't realize, the helium impact can be also quite significant for the semiconductor" 2

2

.

US sanctions on China have meant the country has had to rely more on domestic chip production capabilities rather than importing the latest products from countries suchs as Taiwan. With its domestic chip sector unable to meet global peers in scale, the criticality of uninterrupted supplies is even higher for China, particularly as Middle East tensions continue to create geopolitics-driven uncertainty around resource availability 2

2

.