PETALING JAYA: The Iran conflict is widely read as an oil price event but for technology investors, the risk comes in the form of a targeted disruption to two specialty inputs (helium and bromine) that are non-substitutable in semiconductor manufacturing and cannot be stockpiled indefinitely.
Apex Securities Research said helium is used in two critical fab processes, namely wafer cooling during etching (where it is applied to the backside of the wafer to maintain temperature uniformity and protect yield), and as a carrier gas in photolithography.
During etching, maintaining a constant wafer temperature is essential, and helium enables efficient heat dissipation to ensure consistent material removal.
As a percentage of total manufacturing cost, helium typically accounts for around 0.5% to 2% in standard production processes.
Under normal conditions, this appears immaterial but two factors make it critical in the current environment – helium is not substitutable in the cooling and etching process with any readily available alternative at scale, and the yield degradation from inadequate wafer cooling is nonlinear – small temperature deviations can sharply increase defect rates, resulting in the loss of entire wafer runs, the value of which far exceeds the cost of helium itself, Apex Securities Research said.
Bromine, meanwhile, has a different risk profile as it is used in flame retardants for protecting boards from heat, and as an etching chemical in certain cleaning processes.
Apex Securities Research noted that Israel and Jordan together account for approximately 66% of global bromine production and the Levant shipping disruption has tightened global supply materially.
Unlike helium, bromine supply is more diversified – the United States, China, and Ukraine are also producers – so a full supply crisis is less likely.
But a 20% to 30% price increase in bromine-based flame retardants translates directly into back-end cost inflation with no easy pass-through for low-margin applications, it said.
