Iran crisis affects global chip industry! South Korean lawmakers warned: Key material supplies may be interrupted and chip prices are expected to rise again.

South Korea's ruling party lawmaker Kim Young-bae said on Thursday that the country's chip industry is worried that the escalating Iran crisis will disrupt the supply of crucial raw materials from the Middle East and push up chip prices due to surging energy costs. Kim Young-bae stated that the chip industry also pointed out that this crisis could hamper the long-term plans of tech giants to build artificial intelligence (AI) data centers in the Middle East, weakening the strong demand for chips. It is understood that benefiting from the global technology companies' race to build AI data centers, the prices of storage chips from South Korean companies Samsung Electronics and SK Hynix have been steadily rising. Kim Young-bae made these remarks after meeting with executives from the world's largest storage chip manufacturer Samsung Electronics (SSNLF.US), as well as business and trade groups. He said at a press conference, "We all say that the semiconductor supercycle has arrived, but the data center plans are likely to be hindered, which could pose problems for chip demand." He added, "Officials have raised the possibility that if some key materials cannot be obtained from the Middle East, semiconductor production could be disrupted." Kim Young-bae stated that South Korea's chip industry is concerned that the Iran crisis could disrupt the supply of crucial chip manufacturing materials such as helium from the region. Helium is essential for thermal management in the semiconductor production process, and currently there are no viable alternatives. Samsung Electronics declined to comment on this issue. Impact on data centers On Monday, Amazon.com, Inc. (AMZN.US) reported that some of its data centers in the UAE and Bahrain were damaged in drone attacks during the Middle East conflict, leading to questions about the progress of tech giants' expansion in the region. U.S. tech giants like Microsoft Corporation (MSFT.US) and NVIDIA Corporation (NVDA.US) have positioned the UAE as an AI computing power area, providing support for services like ChatGPT. Earlier, Iran launched multiple drones and missiles towards Gulf countries in retaliation for strikes by the U.S. and Israel last Saturday, which resulted in the death of Iran's top leader Ayatollah Khamenei.