On March 6, 2026, Bloomberg reported that due to escalating conflicts between the United States and Iran, shipping through the Strait of Hormuz faced severe obstructions. The market is not only concerned about the global oil supply but also the potential impact on the chip supply chain that supports the global tech industry. Analysts point out that if shipping through the Strait of Hormuz is disrupted for a long time, the tightening of liquefied natural gas (LNG) supply will affect chip manufacturing in Northeast Asia, subsequently impacting the global semiconductor industry.
Northeast Asia chip manufacturing affected by energy dependency
According to Bloomberg columnist David Fickling, more than half of the world's DRAM and NAND memory chips are produced in South Korea, while about 70% of advanced logic chips are manufactured in Taiwan. These chip manufacturing centers are highly reliant on a stable energy supply, particularly LNG, with Qatar and the UAE being the main suppliers of LNG to Asia.
South Korea's semiconductor industry is dominated by Samsung Electronics and SK Hynix, accounting for about 40% of the Korea Composite Stock Price Index (Kospi); Taiwan's advanced logic chip industry is led by TSMC, holding approximately 45% of the Taiwan Weighted Stock Index. Both countries' economies face additional risks due to their high dependency on energy supply, especially if a LNG supply crunch seriously affects power availability, thereby impacting chip production.
South Korea's capacity constraints and rising LNG reserve pressure
South Korea's production capacity and gas reserves are relatively limited, with current LNG reserves unable to sustain more than two months of import demand. If disruptions in the Strait of Hormuz persist, South Korea may face tremendous pressure on power supply, especially for high-energy-consuming semiconductor manufacturers like wafer fabs, where power instability directly threatens production operations.
In contrast, Europe's LNG reserves can cover about a third of its annual consumption, providing relatively stronger energy buffering capability. To mitigate potential impacts, the South Korean government is urgently seeking alternative supply sources.
Market reaction to tight energy supply
Analysts point out that although LNG is still accessible in the current spot market, price premiums have risen significantly. Major LNG exporters such as Australia and the United States may expand spot sales flexibly in a tight market to capture Asian market shares.
Global tech industry chain faces uncertainty
Overall, if disruptions in the Strait of Hormuz continue, the tightening of energy supply may affect chip manufacturing through power systems and significantly impact the global tech industry chain. Analysts believe that this potential risk has not yet been fully reflected and priced by the market.
