South Korea's government is stepping in to coordinate supply and demand between gas producers and major semiconductor companies as an industrial nitrogen shortage persists. According to Sina Finance, the Ministry of Trade, Industry and Energy recently held talks with small and medium-sized gas filling companies and plans to discuss supply adjustments this month with four major gas producers and large semiconductor firms.

The shortage has continued for three months since August, according to materials submitted by the Korea Federation of Small and Medium Business Ombudsman to the office. Supply to small and medium-sized filling companies fell 70% to 80% in early September and has remained at that level this month, with firms that once received 10 tons a month now getting only 2 to 3 tons.

The shortage is especially severe in South Korea's central region, forcing companies in the capital area to source nitrogen from Yeosu, Gwangyang, and Ulsan, which has added to logistics costs. An industry source said nitrogen supply tightened in August and is expected to remain strained through the end of this year.

The main driver is surging demand from higher semiconductor factory utilization, while large companies' efforts to build safety stocks have also worsened the squeeze. Industry estimates put South Korea's domestic nitrogen market at about 11 million tons last year, with more than 90% of output going directly to large customers in semiconductors, heavy chemicals, and shipbuilding, and less than 10% flowing through small and medium-sized filling companies to medical, food, and metalworking users.