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

The Ukraine War Is Creating Neon Warning Lights For Chips

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.

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.

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.

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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