TECH NEWS – The ongoing war in the Middle East could trigger a “black swan effect” for the chip industry.

The chip manufacturing industry is currently at a critical juncture, yet this serious issue is not being discussed in the mainstream market. We’ve heard before about Asia’s dependence on helium imports from the Middle East and the potential consequences of geopolitical tensions for the semiconductor supply chain. However, the conflict appears to be lasting several weeks. If that continues, Barclays says it could trigger a “black swan” event in the chip industry, meaning the most unexpected impact could occur.

Barclays’ research team points out that the Middle Eastern conflict has now entered its third week, coinciding with the typical cycle of crude oil and natural gas shipments from the Middle East to North Asia. As time passes, the impact of energy supply disruptions gradually becomes apparent. The market’s focus has shifted from whether oil prices will surpass $100 per barrel to whether the semiconductor industry can maintain its power and raw material supplies.

The research team also notes that the conflict has now entered its third week, coinciding with the typical cycle of Middle Eastern crude oil and natural gas shipments to North Asia. The market’s focus has shifted from whether oil prices will surpass $100 per barrel to whether the semiconductor industry can maintain its supply of electricity and raw materials.

The Middle East conflict has a much greater impact on Taiwan and South Korea than on other regions of the world. These countries rely heavily on the Strait of Hormuz for their oil supplies. While these countries reportedly have sufficient reserves to last through the conflict, a large portion of these reserves are earmarked for petrochemical applications. This means that Taiwan and South Korea must rely on import networks for electricity generation.

LNG reserves are currently the biggest concern for these countries. Taiwan’s reserves are reportedly sufficient for only 11 days, so electricity generation could pose a serious challenge for Taiwan in the near future. Furthermore, TSMC accounts for over 10% of Taiwan’s total electricity generation, so any disruption could profoundly impact TSMC’s chip production lines. Taiwan is also vulnerable because, in line with environmental policy, coal-based electricity generation is being phased out.

Taiwan relies on the Middle East not only for LNG but also for helium and bromine. Thus, the current geopolitical conflict has serious consequences for the semiconductor industry. Even a slight decline in TSMC’s production could force Nvidia, AMD, and other AI companies to reconsider their launch and delivery plans, triggering a domino effect that would impact the broader rollout of AI infrastructure.

Major tech companies’ dependence on Taiwan and South Korea indicates that they would also be affected by the conflict in the Middle East. Given the extent to which AI development has driven the U.S. economy recently, there is no doubt that, if the conflict escalates, its repercussions will be felt by everyone involved in the AI race.

Source: WCCFTech, Ctee