Semiconductor material prices surge from geopolitical tensions and supply chain disruptions

The global market for semiconductor manufacturing materials is experiencing a sharp price surge due to a combination of geopolitical tensions and export restrictions on raw materials. Industry sources report that the cost of several key metals and chemical components for the semiconductor industry has doubled or tripled over recent weeks. The situation has been exacerbated by the ongoing conflict in the Middle East, which has compounded existing supply constraints from China.

Refractory metals used in compound semiconductor production equipment have seen particularly steep price increases. According to industry sources, prices for tungsten, tantalum, and molybdenum have essentially doubled. The gallium market is under additional pressure—this strategic material is crucial for GaAs and GaN chip production. In early March 2026, its cost reached around $2,100 per kilogram, more than double the level at the start of 2025. One factor is China's ban on gallium exports to the United States, implemented in late 2024.

The Middle East conflict has also disrupted supply chains for aluminum and helium. Since gallium is almost entirely extracted as a byproduct of aluminum processing, the shutdown of several facilities in the region has pushed aluminum prices to a four-year high. Further uncertainty stems from helium supply issues—this gas is critical for lithography and equipment cooling in chip fabrication plants. Qatar accounts for over a third of global helium production, so any disruption immediately impacts the entire industry.

Faced with mounting risks, semiconductor manufacturers are moving away from the traditional just-in-time supply model. Companies are now building up raw material inventories and seeking alternative suppliers to prevent production halts. This shift is especially vital for GaN and GaAs chips, which are widely used in computer power supplies, laptop chargers, networking equipment, and Wi-Fi 7 devices.