Polar Semiconductor’s Rationed Helium Supply Puts Chip Production at Risk

A gas commonly associated with balloons has become a production constraint at a U.S. chip factory. One of Polar Semiconductor’s three helium suppliers has placed the company on allocation industry terminology for rationing and company president Surya Iyer said the Minnesota plant would have to shut down if helium deliveries stopped.

The immediate problem is larger than one supplier. Roughly one-third of global helium supply has been trapped in the Persian Gulf by the effective closure of the Strait of Hormuz, while no helium-carrying ships are leaving Qatar, previously the world’s second-largest commercial producer. The disruption is now colliding with demand for chips used in vehicles, data centers and military systems and with Pentagon requests for higher weapons-production capacity.

Why Polar cannot treat helium as an optional consumable

Helium is involved in hundreds of process steps at Polar’s fabrication plant in Bloomington, outside Minneapolis. Iyer estimates that 40% to 50% of the factory’s machines use it in some form. According to Polar’s account of its manufacturing requirements, the gas helps equipment maintain a clean, stable process environment and limit defects on semiconductor wafers.

Its value comes from a difficult combination of physical properties. Helium is chemically inert and has exceptionally high thermal conductivity, allowing it to remove heat without readily reacting with process materials. Hydrogen transfers heat effectively too, but its reactivity makes it an unsuitable direct replacement in many applications. Other gases can remove heat more slowly, potentially lengthening process steps and reducing factory throughput.

That makes allocation more serious than a conventional purchasing problem. A semiconductor line is a tightly sequenced system: restricting one material used across hundreds of operations can constrain the output of the entire facility, even if wafers, labor and other process gases remain available. Polar has reduced its exposure by contracting with three suppliers, but the rationing by one of them shows the limit of supplier diversification when the upstream resource remains concentrated.

The semiconductor sector consumes about one-fifth of global helium. Pressure on U.S. supply has increased as manufacturers in South Korea, Taiwan and Singapore seek replacement deliveries; U.S. helium exports have risen 70% since late February. Most American production also comes from one Wyoming facility, leaving little manufacturing redundancy behind the country’s status as the world’s largest producer.

The same bottleneck reaches weapons production

Helium is also required within production chains for fiber optics, munitions and missile electronics, according to Pulsar Helium President Cliff Cain, who has briefed the Pentagon on supply risk. Cain’s blunt assessment was that modern weapons cannot be made without it. That warning arrives while air-defense missiles are already reported to be in short supply and the Pentagon has asked some defense contractors to quadruple capacity for certain weapons.

The result is a direct industrial contradiction: the military wants more output, but one of the inputs needed for missile electronics and other defense components is being rationed. Higher assembly targets cannot by themselves overcome a shortage farther down the materials chain. More production equipment and labor add little if critical process gases cannot reach factories in dependable volumes.

Critics of the White House will reasonably ask why a conflict that has continued for seven months left military production exposed to this shortage. The industrial answer predates any single decision: commercial helium comes from relatively few countries and facilities, it is generally recovered as a byproduct of natural-gas processing, and transport requires specialized cryogenic equipment. The present disruption has exposed how little short-term substitution that structure permits. It does not resolve questions over whether reserve policy, procurement planning or domestic capacity should have provided a larger buffer.

New wells cannot solve a cryogenic logistics problem quickly

Qatar’s Ras Laffan natural-gas complex, where helium is recovered as a byproduct, suffered extensive damage in March. Restoration to pre-conflict production is expected to take at least three years, although the specific condition of its helium infrastructure remains unclear. Russia has separately imposed helium export controls through the end of 2027, while suppliers are drawing material from underground salt caverns in the United States and Germany. Spot-market prices have tripled since the conflict began.

Domestic discoveries offer a longer-term route to greater resilience, but not immediate relief. Pulsar is developing the Topaz helium discovery in northern Minnesota, yet Cain said it cannot supply the market next month. A viable field still needs a processing plant to separate and purify the gas, followed by cryogenic storage and transportation capable of holding liquid helium near minus 452 degrees Fahrenheit while limiting boil-off.

Those facilities take years to establish. Polar therefore faces its near-term production risk with contracts and allocation management rather than a new source of supply even as it works toward doubling capacity to approximately 140 million chips per month. The machines can be installed and the demand can be present, but neither produces a chip if the helium stops arriving.

By Edward Collins — Senior editor for AMI’s performance systems and mechanical design coverage, focused on powertrains, drivetrain systems, manufacturing precision, materials, and high-performance engineering.