The Ongoing Strait of Hormuz Blockage Will Impact the Semiconductor and AI Industries

Arthur T Knackerbracket writes:

If you can't make the chips and you can't run the turbines, you can't run an industry:

With the Strait of Hormuz effectively blockaded as part of the ongoing U.S.-Iran war, a number of shortages beyond gasoline are brewing: Helium, aluminum, and liquid natural gas (LNG) are all in increasingly short supply. This bottleneck could hit a wide range of industries, including chip manufacturing and data centers, as they are key components of day-to-day operation.

And with Iran now confirmed to have released sea mines into the Strait, its closure looks set to continue for a few more weeks, posing a grave threat to many global industries and the global economy in turn.

But the Strait isn't just a transit route for oil tankers; some 11% of global seaborne trade by volume passes through it each year. Ships that transit the waterway are responsible for 20% of the global LNG market - the same gas that powers much of the world's energy infrastructure.

The Middle East is one of the world's largest exporters of refined aluminum, importing the unwrought material before processing and shipping it out. The Middle East is responsible for around 9% of global aluminum smelting capacity, states Reuters. And some regional suppliers have announced incoming shortages. Others have simply shut down refineries while the conflict is ongoing, but they will be hard to start back up again.

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