Party balloon shortage | The weekly recap

As semiconductor engineers know, helium ain’t just about party balloons and squeaky voices.

• It’s irreplaceable in chipmaking – and global supply just took a massive hit.

This week, we want to walk you through a supply chain story that has nothing to do with tariffs or export controls – but could prove just as disruptive to China's chip push.

It starts in Qatar: On March 18, Iranian strikes on Qatar's Ras Laffan industrial complex – the world's largest LNG export hub – took all production offline.

• Helium is extracted as a byproduct of natural gas processing – so when Qatar's LNG plants go dark, helium production does too.

The result? Roughly a third of the world's helium output was wiped out in one go. 

What does any of this have to do with chips? Quite a lot, as it turns out.

Helium is non-substitutable in semiconductor fabrication.

• Both electronics-grade 5N (99.999% pure) and ultra-high-purity 6N (99.9999% pure) helium are critical for wafer cooling, chemical vapor deposition (CVD), atomic layer deposition (ALD), and photolithography. 

The semiconductor industry accounts for roughly 20-25% of global helium demand. But it competes for supply with some formidable rivals. 

• Some 25-30% of global helium flows into the healthcare sector, where most is used to cool the superconducting magnets in MRI machines. Here again, either 5N or ultra-high-purity 6N helium is needed for both manufacturing and maintaining MRIs.
• Other cryogenic applications – from cooling down quantum computing systems to enabling missile and submarine detection to serving as a propellant in rockets and missiles – are also hungry consumers of high-purity helium.

This matters because chip fabs are far from guaranteed to be placed above healthcare and military needs when helium supply gets tight. 

So, where does this all leave China? In quite a pickle, as it turns out.

When it comes to helium, China is heavily import-dependent.

• As recently as 2023, the Chinese Academy of Sciences reported that China imported more than 95% of its helium.
• Matters may have improved somewhat as a new facility in Ningxia came online, but most estimates indicate that China still imports well over 85% of its helium. 

Qatar – through Ras Laffan – accounts for well over half of these imports.

• Russia’s share rose noticeably in Q4 2025, but it still supplied just 40% of China’s 2025 imports.

That’s not all: Unlike fertilizer and crude, China does not maintain state helium reserves – though both industry voices and expert advisors have been calling for this for a number of years now.

That leaves China directly exposed to Qatar's supply gap.

• Domestic spot prices for ultra-pure 6N helium have surged. Industry sources say they’re up 110% since the end of February, adding that most suppliers have suspended spot price quotes altogether to prioritize long-term contracts.
• Prices for lower-grade liquid helium (5N) have reportedly risen by 65% since the beginning of 2026.

And mainland Chinese chip fabs are at a serious disadvantage.

• Unlike leading Korean and Taiwanese players, mainland Chinese fabs are not known to maintain deep inventories, and few have invested meaningfully in helium recovery systems. 
• Plus, they’re under severe pressure from export controls on a wide range of advanced lithography tools, talent bottlenecks in the rapidly growing sector, and mounting margin pressure among mature-node producers.

The upshot is that Chinese fabs are likely not well prepared for a supply crunch of this kind. 

• Leading chip producers elsewhere in Asia may have up to six months of supply resilience due to a combination of on-site storage, long-term contracts, and helium recovery systems. 
• Mainland Chinese fabs – especially smaller players making the older workhorse chips that power sensors, control EV motors, and help your devices charge – could run out in a matter of weeks.

Can anyone fill the gap? Not really.

The vast majority of global helium is produced in just five countries: The US, Qatar, Russia, Algeria, and Canada.

• Helium can only be commercially captured at gas fields with naturally high helium concentrations – it can’t be synthesized from other industrial processes.
• With the possible exception of Russia, no major exporter has significant capacity to increase helium output in the short term. 

So, what’s next? 

Chinese chipmakers will need to reckon with soaring costs and an absolute global shortage of helium alongside all other buyers. 

• Higher spot prices will almost certainly feed into contract prices as the disruption continues.
• Assuming a prolonged shortage emerges, helium suppliers may face pressure to direct limited supplies to MRI maintenance, defense customers, frontier research, and national champion chipmakers over smaller fabs.

And the disruption won’t disappear once the Strait reopens and Ras Laffan resumes operation.

• Strikes on the massive facility have reportedly damaged gas processing infrastructure that produces roughly 14% of Qatar’s helium. These could take 3-5 years to repair.
• Shipping prices and insurance premiums on Gulf-routed shipments have spiked sharply due to the conflict – and those costs will not disappear when the Strait reopens.

If there’s one silver lining, it’s that the crisis could finally force a reckoning in the helium sector.

• This is the fifth major helium supply crisis in two decades – each time, industries and governments have failed to produce structural solutions. 
• Indeed, the US government completed the sale of its helium reserves in 2024, and even stockpile-obsessed China hasn’t managed to build one.

Building more resilience into the global helium supply will require years of exploration, investment, and political will. 

• The question now is whether this will be the crisis that finally forces a reckoning.

In the meantime, if helium hasn’t come up in your boardroom yet this month, it probably should. 

Cory Combs, Head of Supply Chain and Critical Minerals Research, and Even Pay, Head of Agricultural Research, Trivium China

What you missed

Econ and finance

The Gulf crisis has sent manufacturing costs spiking – but based on manufacturing PMI data, China’s firms appear to be shrugging it off.

• Despite surging costs and geopolitical volatility, all major PMI sub-indices – including production, new orders, exports, and employment – either remained in expansionary territory or improved from the previous month.
• The business confidence subindex also pointed to moderately strong business sentiment, higher than levels seen in January.

At its annual earnings call, Bank of Communications (BoCom) said new mortgage applications – a timely indicator for housing activity – were roughly 15% higher in March than the 2025 average.

• BoCom is one of China’s largest mortgage lenders, meaning its comments likely reflect broader trends across the banking sector.
• The bank added that its outstanding mortgage balance may stop contracting this year and gradually start growing again if current momentum persists.

Business environment

On Monday, the market regulator (SAMR) rolled out a plan to enforce the Anti-Unfair Competition Law – the legal backbone of its anti-involution campaign.

• Since July 2025, Beijing has been trying to curb cutthroat “involution-style” competition across sectors like EVs, solar, batteries, and food delivery. 

• The platform economy tops SAMR’s target list – ahead of EVs, solar, and batteries.
• Regulators also pledged new regulations to crack down on unfair competition online – likely aimed at curbing price wars and predatory tactics by platforms more broadly.

Tech

On Monday, China launched the World Data Organization (WDO) in Beijing – organizers say there are already some 200 members from more than 40 countries.

• The WDO’s goal is to help break down barriers by tackling globally fragmented data policies, developing standards and best practices, and helping corporates reduce data compliance costs.
• It also aims to build transnational data ecosystems in key industries, including healthcare, education, and energy.
• However, the WDO will not try to set binding data transfer rules as it is strictly for entity-to-entity coordination.

Politics

On Monday, Taiwan Affairs Office Director Song Tao announced that KMT Chairwoman Cheng Li-Wun will visit the mainland between April 7 and 12.

• Cheng took the KMT helm last October on a platform of easing tensions and reviving cross-strait engagement.
• It will be the first meeting between Xi Jinping and a sitting KMT leader since 2016, and the first time Xi has personally “welcomed and invited” a KMT chair to the mainland.

On March 27, Zhang Chengzhong, 55, was appointed Party secretary of the Ministry of Emergency Management (MEM), replacing Wang Xiangxi, who was removed for corruption.

• The MEM is responsible for workplace safety and coordinates disaster prevention and response.
• Zhang should be formally appointed as minister at the April legislative session, making him the youngest serving minister.
• Zhang is a technocrat who spent the first two decades of his career working in subsidiaries of China National Petroleum Corporation (CNPC) – one of the world’s largest oil and gas producers – in Liaoning province.

Agriculture and rural affairs

On Friday, the macro planner (NDRC) and the ministries of commerce (MofCom) and finance (MoF) announced the launch of pork purchasing for central reserves, citing the need to ensure “stable pork market operation.”

• Let’s be clear: This isn’t a wartime stockpiling effort, and Beijing isn’t bracing for a food security crisis.
• China’s pig farming companies have been battling a supply glut and been locked in an involutionary price war for a while now.
• Average pig prices dropped to RMB 10.68 per kilogram in the fourth week of March, down 29.8% y/y to a nearly eight-year low.

Foreign affairs

Bloomberg reported that Chinese tankers delivered shipments of diesel and distillates to the Philippines and Vietnam over the weekend, despite Beijing’s fuel export curbs imposed earlier this month.

• China banned commercial exports of refined fuels in early March amid soaring prices for petroleum products resulting from the war in the Persian Gulf.
• At the time, we flagged that Beijing might provide emergency relief to neighbors and allies on a case-by-case basis after domestic energy security was in hand.
• Two tankers delivered over 260,000 barrels of diesel to the Philippines on March 28-29, and another vessel delivered roughly 100,000.

As always, it was a busy week in China.

• Thank goodness Trivium China is here to make sure you don’t miss any of the developments that matter.