The Manufacturers Behind the Helium Demand Boom

The semiconductor industry is driving a new wave of demand for helium, sparked by US and EU Chips Acts aimed at boosting domestic chip production.

As governments and companies move to protect the industry from supply chain issues exposed during the COVID-19 pandemic, helium, which is a vital component in chip manufacturing, is becoming a critical resource.

In recent years, global tensions and supply chain vulnerabilities have led to nations prioritising the domestic production of semiconductors, crucial components for everything from electronics to advanced technologies like AI and 5G telecommunications.

This has brought helium into focus. The US Chips Act and EU Chips Act are part of this push to secure “technological sovereignty” by reducing reliance on foreign manufacturers.

However, these initiatives require a significant supply of helium, a unique element essential in chip manufacturing due to its high thermal conductivity and non-reactive properties.

Used to maintain the precise cooling conditions necessary in advanced chip production, helium has no viable substitute, meaning as semiconductor manufacturing grows, so will the need for helium.

This creates complex supply chain challenges and raises sustainability concerns in an industry already strained by the finite nature of helium supplies.

Demand growth: Helium's role and market pressures

According to research from IDTechEx, helium demand in the semiconductor industry is set to grow five-fold globally by 2035, with demand in the US alone expected to quadruple by 2033.

As semiconductor technologies evolve, requiring smaller and more efficient nodes, helium’s role becomes even more critical for cooling in chip production.

Dr Shababa Selim, Technology Analyst at IDTechEx, states that "Helium's exceptionally high thermal conductivity and chemically inert nature allow for the fast cooling of chips during production."

This unique property will only become more vital as devices continue to shrink in size, with greater demands for efficiency and heat management in manufacturing.

This demand surge is largely fuelled by sectors like AI, quantum computing, 5G and electric vehicles (EVs), which require advanced semiconductor nodes for faster processing speeds and greater energy efficiency.

Consequently, meeting these advanced technological demands without interruption means semiconductor manufacturers will likely need to adopt helium conservation practices, including recycling and reclamation.

Shababa highlights the necessity of these measures: "The semiconductor industry will increasingly need to consider helium management solutions, such as helium recycling and reclamation technologies, to future-proof the industry's sustainable growth."

In other words, without innovations in helium use and recovery, the sector could face both supply constraints and rising costs, potentially affecting chip production worldwide.

Onshoring and supply chain impacts

Efforts to scale up domestic semiconductor production are already in motion.

The US Chips Act, for instance, has allocated more than US$30bn of its US$39bn in incentives to onshore chip manufacturing, with Intel committing to invest more than US$100bn over the next five years across several US states.

Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest contract chipmaker, is constructing three fabrication plants in Arizona. Set to open in 2025, these plants will employ the latest 4nm process technology, producing transistors with enhanced performance and energy efficiency.

Overall, these investments reflect a massive onshoring trend with an estimated US$395bn in semiconductor-related developments expected in the US over the next decade.

However, such rapid expansion creates additional strain on helium supplies. While production capacity for helium is projected to increase, with Qatar and Russia both planning to ramp up extraction, ongoing geopolitical tensions complicate its availability.

Helium, unlike other materials, is a finite resource with recurring shortages that can lead to substantial price fluctuations.

To address these challenges, the semiconductor industry must consider helium management strategies. Recycling and reclamation could provide a safeguard against volatile supply chains and help meet the growing demand sustainably. With these solutions, companies can minimise waste, conserve resources and potentially reduce costs.

"The semiconductor industry will increasingly need to consider helium management solutions such as helium recycling and reclamation technologies to future-proof the industry's sustainable growth," says Dr Selim.

Balancing helium supply and demand will be essential for the future stability of the semiconductor sector.

In the face of expanding semiconductor production, nations are aiming to reinforce resource management and ensure demand for helium does not compromise the sustainability of the industry.

As semiconductor innovation continues to accelerate, aligning helium resources with production needs will be essential for maintaining the momentum of domestic chip manufacturing worldwide.

The long-term success of these initiatives may well depend on the industry’s ability to innovate responsibly with helium and protect its supply chain from future disruptions.

Make sure you check out the latest edition of Manufacturing Digital and also sign up to our global conference series - Manufacturing & Mobility LIVE

Manufacturing Digital is a BizClik brand.