How prolonged Iran war could disrupt Asia tech industry from chipmaking to AI data centres
A prolonged Iran conflict could disrupt Asia's tech industry, affecting chip production and AI data centers due to potential crude oil and LNG supply chain disruptions. The region's exposure to crude oil and refined petroleum products could lead to increased manufacturing costs and trade financing issues.
Asia's tech industry is bracing for disruptions due to the Middle East turmoil. Prolonged hostilities could throttle semiconductor production and AI data center buildout. The Strait of Hormuz, a critical waterway for global oil and LNG trade, remains effectively closed. Crude oil prices have surged above $100 per barrel, and LNG prices have approached $20 per million British thermal units. South Korea, Taiwan, and Singapore are vulnerable to LNG supply disruptions, with Qatar's Ras Laffan complex, a major LNG supplier, damaged in March. Repairs could take three to five years, affecting helium supply, crucial for chip production. Chipmakers like Samsung Electronics and Taiwan Semiconductor Manufacturing Company have seen their shares drop. Experts warn that a two-month disruption could compound into a longer period, affecting the industry's ability to meet demand for graphics processing units and high-bandwidth memory.
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