Iran conflict not expected to disrupt AI supply chain in the near term, according to Seagate

Bloomberg Report: Middle East Tensions and the Tech Supply Chain

Despite ongoing unrest in the Middle East, Seagate Technology Holdings remains confident that its technology supply chain will not face major disruptions in the near future. This reassurance comes from a senior executive at Seagate, who addressed worries about the potential shortage of crucial materials like helium due to the conflict.

Some investors are concerned that if the conflict continues, it could exacerbate the already limited availability of memory chips and storage devices. This uncertainty has impacted the outlook for both Seagate and Western Digital (WD), the two leading suppliers of hard drives for data centers and personal computers. Both companies have indicated that their hard drive inventories for 2026 are already fully committed.

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Ban Seng Teh, Seagate’s Chief Commercial Officer, explained on Bloomberg TV that the company’s supply chain is robust enough to absorb any immediate shocks. He also mentioned that Seagate is actively seeking alternative sources to further secure its material supplies.

Bloomberg Economics estimates that Qatar’s halt in liquefied natural gas production at Ras Laffan has removed roughly one-third of the world’s helium supply. This poses a significant challenge for semiconductor manufacturers, as helium is vital in their production processes and there is no easy replacement, according to Bloomberg Intelligence analyst Michael Deng.

Deng noted that if the helium shortage continues for several weeks, chipmakers may need to prioritize AI memory production, intensifying the current shortage of memory chips. Helium is also essential for manufacturing high-capacity hard drives.

The global surge in demand for hard drives is being driven by the rapid expansion of data centers to support artificial intelligence, which is increasingly seen as a decisive factor in both business and international competition.

Teh emphasized that companies must invest in AI technologies. He clarified that Seagate is not increasing the number of units produced, but is instead focusing on boosting the storage density of each drive, a strategy echoed by WD’s leadership. He expects prices to stabilize in the coming years.

Reporting support provided by Mayumi Negishi and Lauren Faith Lau.

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