Nick Hodge,
Publisher
July 19, 2021
What do these news headlines have in common?
Chip Shortage Causes Ford to Slash Vehicle Production in July
Laptops Getting More Expensive Because of Global Chip Shortage
Global Chip Shortage Sparks Medical Equipment Production Warnings
They’re all from the last few weeks.
But they involve a diverse array of products from a wide range of industries.
They also all highlight a growing set of production bottlenecks caused by a severe and still-worsening global shortage of semiconductor chips. The lack of chips is making it harder to make just about anything with an “on” switch — resulting in scarcities and higher prices for many electronic goods.
News publishers have put out myriad headlines in the last few months about the chip shortage, but few have bothered to explain why it’s happening beyond a vague reference to “post-pandemic supply chain disruptions.”
As it turns out, those supply chain disruptions largely center on a single chemical: helium. And the growing global helium shortage is arguably a bigger story than the semiconductor shortage.
Why Helium Is Essential to Semiconductor Manufacturing
Semiconductor manufacturing is a meticulously clean process in which a stray speck of dust, a small unexpected temperature variation, or even an ambient chemical reaction between a solvent and the air can ruin an entire batch of chips.
To prevent that, semiconductor manufacturers tend to immerse their chips in chemically-inert, thermally-protective substances at various important points in the fabrication process. And that’s where helium comes in.
You may remember from high school science class that helium is a “noble gas”. It’s one of the elements on the far right side of the periodic table with electron configurations that make it extremely unreactive. It’s also an excellent thermal conductor, and can remove excess heat from a portion of the assembly line or cool it down to optimally-low temperatures.
As a result, semiconductor manufacturers use a lot of helium.
Intel is one of the largest chip makers in the world. And one of its top PhDs testified to Congress that “without helium, our factories would not operate.”
And the same goes for every chip maker.
In fact, semiconductor and superconductor manufacturing is estimated to account for 28% of global helium consumption. In countries with substantial electronics manufacturing activity, like South Korea, it’s estimated to account for 60% of helium consumption.
Rather, we should say that semiconductor manufacturers did use a lot of helium before COVID-19 effectively shut off the spigot.
How the Helium Shortage Has Kneecapped The Global Semiconductor Industry
According to the U.S. Geological Survey, helium production dropped 17% in 2020 from a year ago — largely due to pandemic-related workforce reductions.
China and Taiwan have also started to stockpile the gas for strategic purposes as geopolitical tensions between the two countries rise. This has further constrained the supply available for export — especially in Asia, which is home to the vast majority of the world’s semiconductor manufacturing facilities.
In sum, a worsening helium shortage may actually be the single biggest factor behind the semiconductor shortage that is grinding global supply chains to a halt.
And in the months and years ahead, investors in new helium producers could play an important role in rescuing those supply chains. They could also make a lot of money in the process.
Keep reading for more information on how.
Call it like you see it,
Nick Hodge
Editor, Daily Profit Cycle
Nick Hodge is the co-owner and publisher of Daily Profit Cycle and Resource Stock Digest. He's also the founder of Hodge Family Office, the umbrella organization for his three premium services: Foundational Profits, Family Office Advantage, and Hodge Family Office . He specializes in private placements and speculations in early stage ventures, and has raised tens of millions of dollars of investment capital for resource, energy, cannabis, and medical technology companies. Co-author of two best-selling investment books, including Energy Investing for Dummies, his insights have been shared on news programs and in magazines and newspapers around the world.
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