War threatens chips supply
A warning siren has been sounded for semiconductor manufacturers making chips for vehicles because of the conflict in Iran.
Some of the world’s largest chipmakers have only six months’ worth of helium in the pipeline, raising concerns about another semiconductor shortage a few years after the industry recovered from the Covid-19 pandemic.
Helium is a by-product of natural gas and is used to make the chips essential for advanced driver-assistance systems and hardware in electric cars.
A manufacturing meltdown is unlikely at this point, but the Middle East conflict threatens to throw off a delicate balance if it continues.
About 30 per cent of the global helium supply comes from Qatar, home to the world’s largest liquefied natural gas plant. Iranian missile attacks struck that facility in March, causing “significant damage,” according to the Qatari government.
The country’s state-owned gas company reports the halt in production after the attacks will cut helium exports by 14 per cent and semiconductor facilities are struggling to keep a sufficient helium supply available.
The constriction in the global helium supply is the latest challenge for semiconductor manufacturers dealing with Trump tariffs and a shortage in dynamic random-access memory, a chip ingredient that’s in high demand because of the AI boom.
Suppliers also have felt the squeeze from companies consolidating car architecture, which is reducing the amount of hardware needed in vehicles.
Industry confidence sinks
Confidence across all major sectors of the motor industry fell in the first quarter of 2026 with uncertainty over the Iran war, tariffs and inflation leaving many feeling less optimistic than when the year started.
In Automotive News’ auto industry confidence index, the overall score among carmakers, dealers and suppliers dropped to 55.6 points from 58 in the fourth quarter.
Carmaker scores fell from 54.6 from 58.2. Supplier scores fell to 54.5 from 57.1 and dealers’ fell to 54.5 from 56.3.
Overall pessimism jumped to 53-46 per cent last time, while optimism dropped from 22-32 per cent. When asked what makes them optimistic over the next six months, the top answer for every group was “nothing”.
The index measures the sentiment of the car industry from executives across the globe. The weighted index score reflects business performance and the industry as a whole, but also expectations for those performance levels in the coming six months.
Despite the overall confidence dip, respondents said current performance is down only slightly across the industry to 63.6 from 64.7. All groups say the coming months will be difficult.
Some carmaker respondents said their biggest challenges range from product quality and lack of inventory to retail demand and rising costs. Click here for the full story.
