Archive for category: Helium

In June, 2017 a group of Middle East countries led by Saudi Arabia recently united to sever diplomatic relations and initiate a blockage of their neighbor Qatar for allegedly enabling the funding and growth of terrorist groups. The impact of the blockage and closing of export routes previously available to Qatar had an sudden impact on its ability to export 32% of the global supply of helium. This created an immediate threat to the supply chain, manufacturing and innovations in electronics, technology, internet access, medical and military industries who all require a steady supply of helium.

“While there was already a need for expanded helium exploration and production in the US to meet the growth in global demand, the geopolitical climate in the Middle East has amplified the opportunity for investors,” explains Lucas Kalisher, CEO of Summit Source Funding a private equity firm that specializes in private investor funded Helium exploration and production projects in the United States.

In July, Qatar was able to get back online with producing helium but the crisis and challenges are far from over.

“The thing this really highlights,” says  Phil Kornbluth, head of U.S.-based industry consultancy Kornbluth Helium Consulting, “is that the helium supply chain, even though there’s ample supply when everything is running, is inflexible and fragile.” The challenges of handling liquid helium and the fact that it’s only made as byproduct of natural gas in a few places around the world all make helium a tricky product to source. Qatar is producing helium again, but the political crisis is not over. It’s been a wake-up call,” reports The Atlantic.

Qatar is the second largest producer of helium and the boycott by the Arab neighbors forced it to close its two helium production plants. “Helium is the single commodity that is affected most by this blockade because it’s probably the only thing where Qatar is a major world producer and the supply has been completely cut off,” Kornbluth told Reuters.

Scientist Fear Helium Shortage will Impact Research and Medical Manufacturing

Nature.com reports that, “Scientists fear they may be forced to halt experiments or shutdown laboratory instruments because the ongoing blockade of Qatar is threatening their helium supplies. The Gulf state supplies hospitals and laboratories around the world, but had to close its two helium plants.”

Helium Shortage Has Global Impact and Creates US Opportunity

Prior to the Arab blockade, helium supply was already at risk. “And, although the world’s helium reserves have not been depleted, it is a nonrenewable resource. When it’s gone, it’s gone. That’s true of many substances, but with helium, things are different. There is no known substance that can replace it,” writes Dr. Don Lincoln,  senior physicist at Fermilab and CNN contributor.

On its website, Qatar’s Rasgas company succinctly explains the importance of Qatari helium to Asia: “Since 2000, world demand for helium has increased by approximately 20 percent. Future growth in helium consumption is expected to be driven by demand from electronics manufacturers in Japan, China, Republic of Korea, and Taiwan.”

According to Reuters reporting on the helium shortage, “Demand for the gas, driven particularly by Asia’s booming manufacturing industry, is on the rise. U.S. reserves meanwhile are dwindling due to the lack of helium production from its oil and gas fields, and the country has already had to start importing helium from Qatar.” With that supply cut off, Asian countries and its suppliers of helium are now looking to the US to meet the demand. This could have significant implications if helium prices rises and increase opportunities in the US.

Also according to Reuters, “Japan’s Iwatani, which is a major supplier of helium to China and Southeast Asia, ‘said it had a month’s supply in stock’.  German industrial gases company Linde said it was working on meeting customers’ requirements via helium in the United States as well as some smaller exporting countries.”

Even before Qatar’s move to shut down helium supplies, global demand for the gas was growing at 2 percent a year.

What the Helium Shortage Means for US Investors

In the near and long term it could well mean countries around the world and, in Asia in particular, will be sourcing their helium supply elsewhere. The quest for alternative helium suppliers could benefit the United States and those who invest directly in helium production.

“Going forward, helium users should pay increased attention to the make-up of the supply portfolio of its suppliers,” wrote Kornbluth (Gasworld US Edition, August, 2017).

The good news for investors is that companies like Summit Source Funding in Colorado are leading the way in the discovery of new helium exploration and production opportunities. Private investment in these projects could mean significant gains for investors. Increased demand, political instabilities in foreign helium producing countries and decreased supply, could mean great opportunity for investors that qualified to invest in helium exploration and production projects.

“Summit Source Funding has secured significant opportunities to extract helium that could benefit private investors. We have wells and acreage with some of the highest concentrations of helium in North America.  We expecting to have production facilities coming online by the end of 2017,  just in time to support the increased global demand on US produced helium.  Even as supply increases, the opportunity for investors will remain. Helium is a limited resource with no alternative to support the supply chain of so many diverse industries,” said Kalisher.

For More Information Contact:

Jeff Ragsdale
Executive Director of Business Operations/Director of Investor Relations

Summit Source Funding
2760 29th Street, Suite 2A
Boulder, Colorado 80301
Office: (800) 928-6964
Fax: (720) 465-6533

Email: Info@SummitSourceFunding.com

Experts in the electronics industry know that helium is a critical part of making the components that bring us the internet, smartphones, home healthcare, and almost any of the modern electronic technology conveniences that we take for granted today.

The Electronics Supply Chain

There was $1.42 trillion (yes trillion) worth of electronic systems manufactured in 2015.  This includes the gadgets that consumer use constantly – smartphones, tablets, PCs – as well as industrial, medical, automotive, and defense electronics.  This represents a wide range of applications, but at the heart of all of them are semiconductor chips.

If you take apart any gadget, you will find thin rectangular items that measure a fraction of an inch on each side.  These are the semiconductor chips that do the computing, storage, and communication functions that all of these products need.  The vast majority of these are made with silicon, the most common semiconductor material, with properties ideally suited to these functions.  To be able to do that, though, silicon needs to go through extensive processing to create the specific circuitry for each chip.  This is where helium comes in.

Helium in the Semiconductor Manufacturing Process

The processing of silicon into functioning chips is done in a fabrication facility (“fab”) with expensive equipment and ultra-clean conditions.  Modern fabs cost billions of dollars, and each of the many pieces of equipment costs millions, so it is important to have the processing running efficiently to make use of that investment.  Helium serves multiple functions in these processes.

Helium has several properties that are leveraged in the semiconductor manufacturing process.  Most importantly, it is an “inert” gas, meaning that it does not react with other elements.  This makes it ideal as the environment for the chemical reactions that take place during the processing.  Many of these are gas- or liquid-based, so having an inert gas around the silicon prevents any unwanted reactions.

Helium also has a high thermal conductivity, meaning that it conducts heat away effectively.  This helps to control the temperature of the silicon during these processes.  This is increasingly important as the dimensions of the circuitry on the silicon continue to shrink.  It would be impossible to drive this miniaturization without the process control that helium provides.

Finally, helium is used because of its cooling properties.  It is a liquid at extremely low temperatures, which allows it to cool magnets to a temperature that optimizes their properties.  The magnets are used in some types of semiconductor equipment, as well as magnetic resonance imaging (MRI) systems and other medical applications.

Helium and The Bottom Line

The semiconductor industry generated $353B of revenue in 2015, with 787 billion units shipped.  Microprocessors – the main semiconductor device for computing – represented $60B, and memory chips — which store your music and run your games — were $72B.  All of this represents an enormous investment by some of the biggest companies in the world, and all of it hinges on materials such as Helium.  With the ever-growing demand for electronic devices, any critical piece of the supply chain can represent an excellent opportunity for investors.

Most people are unaware that helium is vital to technology, including the very Internet access people use to read this article.

Helium is Fantastic at Cooling

One of the main functions helium provides is being able to cool things down quickly.  In fact, the United States Geological Survey (USGS) claims that 32 percent of helium usage is for cryogenic (freezing) applications. Many technologies need this ability to cool down in order to work properly. Technology which provides Internet access requires helium for cryogenic applications.  This includes:

• Fiber optics manufacturing — helium is used to cool down fiber optics which goes into cables for data transfer. Fiber optics require an all-helium environment to prevent air bubbles from being trapped in the delicate fibers. Fiber optics are fragile and can break, which is why using helium is vital to the process. Using other methods of cooling would possibly contaminate the fibers, making them unusuable.
• Semiconductor cooling — helium is used to transfer heat away from semiconductors (computer chips) when manufactured. Helium is also used to cool the magnets used in manufacturing the semiconductors. The helium actually transform the magnet into a superconductor, thus making it even more powerful.

Controlling the atmosphere in the manufacturing process and experiments is vitally important, so much so that companies use 18 percent of the annual helium usage to provide that controlled environment. Like the requirement to use helium during fiber optics manufacturing to prevent air bubbles, helium provides a safe and inert way to control the environment in manufacturing and testing different computer components.

How We Use Fiber Optics

Fiber optics is essential for today’s Internet. About 25 percent of today’s Internet is made up of fiber optics and that number is expected to increase as more carriers switch over to the ultra fast fiber optic cables. Unlike copper based technologies such as DSL and broadband cable, fiber optic isn’t limited by electricity and resistance. It works by transmitting data in the form of light, thus giving amazing speeds such as 1 gigabit per second throughput.

Helium is in Demand

People are taught that helium is the second element in the periodic table in their high school chemistry class, but not much in terms of applications.  Other than party balloons and speaking with a squeaky voice when inhaling it, most people don’t pay much attention to helium, even though without it, the world would look very different today.  Helium is vitally important because it is a nonrenewable resource that is extracted from natural gas.  What’s more, in 2015 the world’s demand for helium continues to increase. In 2015 it’s estimated that companies extracted about $900 million dollars worth of helium in the United States alone. During that year, it’s estimated that the world used 1.5 billion cubic feet of helium.

Helium is vitally important for today’s technology, including Internet access. Without helium, people would not have the same level of technology they enjoy today.