Ex-U.S. official calls for diversification strategy for S. Korea's chip sector amid Hormuz disruptions

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"I think many of us weren't completely aware of just how reliant South Korea and really much of the region are on helium for the chipmaking industry, and much of that helium has been sourced from the Middle East, historically," Kritenbrink, a partner at the Asia Group, said.

"I think you've seen Korea and other key countries in the chip sector really work hard to diversify their sources of helium. I think diversification is the long-term name in the game. I don't think countries like South Korea really have any other choice."

This photo, taken June 21, 2023, shows Daniel Kritenbrink, then assistant secretary of state for East Asian and Pacific affairs, speaking to the press during a visit to the foreign ministry in Seoul. (Yonhap)

Kritenbrink described the semiconductor sector as both South Korea's "shield" and "vulnerability."

"Chips are carrying much of Korea's growth. We read all about that, but the sector also depends on stable electricity, specialty gases and predictable logistics," he said.

The Asia Group report pointed out that in South Korea, government intervention and aggressive diversification efforts, combined with leading firms' willingness to pay premiums for inputs, have contained immediate supply challenges stemming from the Middle East conflict.