The War In Ukraine Could Lead To More Disruption In Chip Manufacturing Supply Chains

Russia’s invasion of Ukraine has the potential to reverberate across the global chip industry, compounding current supply shortages. Ukraine is a major supply of neon gas required for chipmaking lasers. It provides more than 90% of the total semiconductor-grade neon in the United States.

An Intel Tiger Lake chip is displayed at an Intel news conference during the 2020 CES in Las Vegas, Nevada, U.S. January 6, 2020.

Russia produces over a third of the palladium metal used in semiconductors. But, according to JPMorgan, the ongoing Russia-Ukraine crisis is limiting the supply of these components, which might affect companies like Intel, which imports around half of its neon from Eastern Europe.

Breakingviews - Ukraine war flashes neon warning lights for chips | Brv -  Clm

The suffering will not be equitably distributed. For example, only around 20% of the gases used by ASML, an equipment supplier, come from crisis-affected states.

Why is there a global chip shortage—and how will it end? | Fortune

As per JPMorgan, companies may turn to China, the United States, and Canada to boost supplies. Unfortunately, it seems like a difficult road. The chipmaking industry was equipped to deal with a jump in neon prices brought on by the 2014 Crimean conflict; however, the current crisis looks to be much greater.

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