According to TrendForce, a Taiwanese research firm, the Russian invasion of Ukraine could accentuate the shortage of semiconductors world.
A shortage of neon to be expected because of the war in Ukraine?
Today, Ukraine supplies 70% of neon worldwide. This noble gas, the second lightest in the world, is one of the rare gases that allow the manufacture of semiconductors. This noble gas is mainly used in the lithography stages of semiconductor production. The Russian-led war in Ukraine could create neon shortages.
3G is gradually disappearing in the United States
Analysts say chip makers still have a head start, but depending on how long the war will last, semiconductor production could well be affected. In the short term, the global semiconductor production lines are not interrupted.
However, the reduction in gas supply will bring into play the laws of supply and demand, which means that prices may increaseand that these increases are likely to be passed on to consumers…
Another analyst firm, Techcet, precise that Russia is also a major supplier of neon across the world and the country also produces a lot of palladium, a essential metal for making catalytic converters and many electronic components. Sanctions imposed by NATO members against Russia may cause suppliers to seek alternative sources of supply.
The global supply chain is still very fragile
In the long term, this war really risks accentuating the shortage of semiconductors. Indeed, Russia’s invasion of Ukraine comes as demand for chips has generally increased throughout the Covid-19 pandemic. On the business side, the demand for specialized chips in artificial intelligence expected to increase by more than 50% per year over the next few years.
The numerous investments announced, such as Intel’s desire to build a huge semiconductor production site in Ohio for 20 billion dollars, the 52 billion dollars announced by the United States or even the Commission’s plan European Union at 43 billion euros, may not be enough.
Gina M. Raimondo, Secretary of Commerce in the United States, believes that “The semiconductor supply chain remains fragile and it is critical that Congress act quickly to pass the President’s proposed $52 billion in chip funding as soon as possible”.
In the United States, the stock of semiconductors went from 40 days ahead in 2019 to less than 5 days in 2022. Automobiles, medical devices, and energy management equipment are the most chip-intensive areas. A new neon supply problem due to the war in Ukraine could have a considerable impact on the shortage.