A growing helium shortage, compounded by increasing demand, poses a serious risk to industries reliant on this crucial resource. As the global supply tightens, especially in semiconductor production, businesses face rising costs and potential disruptions.
Helium, best known for making party balloons float and voices squeaky, plays a crucial role far beyond fun and games. However, this ultra-cool, ultra-light gas also plays a vital role in the production of semiconductor chips.
Smartphones, computers, tablets, TVs, MRI scanners, and certain fusion reactors and particle accelerators cannot work without these chips. Alarmingly, the growing demand for helium and its global scarcity put the billions of people who rely on these technologies every day in jeopardy.
What is the role of Helium in technology
Due to the crucial role this natural atmospheric gas plays in production and operations, technology was responsible for the helium industry’s last major market boom. The technology industry uses this gas to cool semiconductor chips in smartphones, computers, TVs, and tablets, enhance computer hard drive storage capabilities, and to manufacture the fibre optic cables needed to run Wi-Fi.
In production terms, a little helium can go a relatively long way. A single tank of this gas can produce approximately 10,000 hard drives. However, helium is used for significantly more than hard drive production.
An excellent heat conductor, helium remains a liquid at temperatures close to zero, making it the ideal refrigerant for anything that must be kept at extremely cold temperatures. This makes liquid helium integral to any technology that uses superconducting magnets, such as MRI scanners and some fusion reactors.
In gas form, helium conducts heat away from silicon, preventing semiconductor fabs from being damaged. The semiconductor industry’s reliance on helium is set to increase as the industry advances manufacturing processes toward the smaller nodes required for autonomous vehicles, AI, and other applications.
There are currently no viable alternatives to this element, which has been added to critical minerals lists in the European Union and Canada. The crucial role helium plays in industries such as thermal management systems for batteries, chemicals and pharmaceuticals, scientific balloons, and aerospace engineering will further increase demand for this naturally scarce gas.
Helium’s natural scarcity
All helium in the world today was formed millions of years ago by the breakdown of radioactive materials trapped in rocks below the earth’s surface. This important element is found through stringent gas detection methods.
Three countries, namely the US, Qatar, and Algeria, and fewer than fifteen companies are responsible for most of the world’s helium production. Together, the US and Qatar produce more than 75% of all helium used worldwide. However, the US’ helium production and exports have slowed in the past decade, even as US consumer demand increased by 40%.
When helium is extracted from the underground reservoirs in which it is trapped, it’s usually done so along with other natural gas. While helium can be readily separated from those gases before combustion, this can be a costly process if the concentration of helium is low. Generally, gas companies do not bother extracting helium if the concentration is lower than 0.3%.
Viable levels of this gas are found only in a handful of countries, including Algeria, Canada, South Africa, and the US. Although Qatar’s natural helium reserves have lower concentration levels than those of other countries, the country produces sufficient natural gas to justify its helium recovery.
Currently, the issue is not so much a lack of naturally occurring helium, but rather helium producers’ inability to deliver it to customers around the world in a timeous manner for various reasons, such as conflicts that disrupt the supply chain. Another significant challenge is that helium atoms are too light for earth’s gravity to hold them. As much as 50% of the helium extracted from natural gas is lost before it can be used.
A number of countries have recently started to produce helium in an attempt to stabilise the supply chain, among them Canada, South Africa, and Russia. Some gas companies have also begun helium gas detection at sites where it might be possible to extract helium without treating it as a natural gas by-product, such as in Tanzania.
Supply shortages and price volatility
Given the low number of sources, the helium supply chain is sensitive to disruptions. This, together with the rapid ascent in prices of this gas in recent years, has further jeopardised semiconductor producers, research groups, hospitals, and other sectors, organisations, and institutions that heavily depend on it.
The global market for this gas has experienced four shortages since 2006. Additionally, the price of helium has almost doubled since 2020, having risen from $7.57 per cubic metre that year to $14 per cubic metre in 2023. This is not good news, considering that the global demand for helium is expected to double to approximately 322 million cubic metres by 2035 and grow at a 5.7% CAGR, while helium production is expected to see low growth.
Industry’s response to helium’s scarcity
Various industries have begun making strides in their responses to helium’s scarcity. Some MRI manufacturers have developed scanners that require significantly less helium than earlier models. Numerous chemists have switched from helium to hydrogen for gas chromatography, which is the process used to separate mixtures. Some welders have successfully substituted hydrogen or argon for helium on some welding jobs.
Unfortunately, helium has no good alternative in most of its applications. To further compound the issue, it’s much harder to recycle helium when it’s used as a gas, which has significant implications for electronic, semiconductor, and other industries.
Implications for semiconductors
With AI helping to drive the demand for computing, countries such as the US are investing heavily in building new fabs. This is likely to accelerate the demand for helium. Semiconductor and other chip manufacturing is likely to become the gas’ biggest application in the near future.
It’s likely that most industries will phase out helium’s non-essential uses, using it mostly for cryogenic cooling or for applications in which there is no viable alternative to the gas. These other applications include semiconductor fabs, quantum computers, fibre optic cables, particle accelerators, and some fusion reactors.
Developers and manufacturers will need to take this into account, given the upward trajectory of helium prices. They may also be compelled to explore potentially costly and laborious alternatives to maintain production without helium. Depending on the outcomes, researchers may be forced to give up projects, patients might miss out on required diagnosis from MRI scanners, and consumers might be faced with substantially higher prices for many technology products.
Work with experts in R&D
The global scarcity of helium has serious implications for electronics, semiconductors, and a variety of other applications and industries. While steps are being taken to increase gas production and secure the supply chain, progress in this regard is slow and unlikely to keep up with rapidly increasing global demand.
This calls for a proactive response from developers and manufacturers in various sectors, such as greater investment in research and development of technologies with less reliance on the gas.
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