Asia-Pacific tech supply chains at risk as Brent oil could average $130, peak $200
Chipmakers seen more resilient whilst consumer electronics are most exposed in prolonged conflict, S&P reports.
Prolonged Middle East conflict could significantly disrupt Asia-Pacific technology hardware supply chains, with Brent crude oil potentially averaging close to $130 per barrel and peaking at $200 per barrel under a downside scenario, warns S&P Global Ratings.
In a report titled “Asia Tech Hardware: Middle East Risks Will Weigh On Supply And Demand,” S&P Global Ratings said Asian technology firms face varying levels of exposure to higher costs and supply chain disruption linked to geopolitical risks in the Middle East.
The base case assumes any effective closure of the Strait of Hormuz would ease during April 2026, limiting near-term disruption for rated companies, according to S&P Global Ratings credit analyst Cathy Lai.
She said high-end chipmakers are better positioned to manage cost pressures due to strong demand and continued investment in artificial intelligence (AI) data centres, whilst consumer electronics manufacturers have less flexibility to pass on higher costs.
S&P Global Ratings added that a longer conflict would place greater pressure on supply chains for advanced semiconductor producers and weigh on margins and demand for products such as smartphones and PCs.
The report covered four segments in Asia-Pacific technology hardware: advanced semiconductors, mature semiconductors, consumer electronics, and electronics manufacturing services (EMS).
It said most exposures are indirect, including energy supply constraints, raw material availability, and logistics disruption, adding that cost inflation and demand weakness would become more pronounced if disruptions persist.
The report noted that much of advanced semiconductor manufacturing relies on regions dependent on liquefied natural gas and oil imports from the Middle East for power generation.
It highlighted Taiwan as particularly exposed due to electricity supply constraints, noting that Taiwan Semiconductor Manufacturing Co. accounted for about 9% of Taiwan’s total electricity consumption in 2024.
Helium supply was also identified as a key risk for semiconductor manufacturing, although S&P Global Ratings said leading firms currently hold sufficient inventory and have some ability to diversify supply sources.
Under the base case, Brent crude is expected to average $92 per barrel in the second quarter of 2026 and about $80 per barrel for full-year 2026.
S&P Global Ratings said companies with strong supply chain resilience and exposure to AI-driven demand are expected to be better positioned, whilst those focused on commoditised consumer electronics face higher pressure in a prolonged disruption scenario.
