Global Chip Shortage To Worsen With Russia’s Invasion Of Ukraine

The implications of the Russia-Ukraine conflict on the global world got more intense as the global chip market, already experiencing a strain is the latest casualty of the warfare.

The global chip shortage had in the past few months affected the production of materials for PCs, Smartphones and even EV cars, with global tech companies majorly feeling the brunt.

Russia’s Military assault on Ukraine has pushed two Ukrainian leading neon suppliers, Ingas and Cryoin, to temporary halt operations, implying a considerable disorder in global economic outcomes.  

Neon a colourless, odourless, inert monatomic gas under standard conditions, is a vital component used in the manufacturing of semiconductor chips, with about half of the global neon semiconductor grade being developed from Ingas and Cryoin, it’s two major suppliers.

Both Ingas and Cryoin deliver about 45 percent and 54 percent respectively of the exact neon needed to produce semiconductor chips.

Ingas averagely produces about 15,000 to 20,000 cubic meters of neon per month and has 75 percent of the production going straight to the chip industry.

TechcetGlobal, a market research firm in it’s report posits that neon production reaches 540 metric tons in a calendar year.

The report says while Cryoin stopped operations on the first day of the Russian attack, Ingas continued production but stopped operations this week as the assault lingered.

The World Health Organisation (WHO) also reported BBB that the conflict had last week Wednesday hit Inga’s location, in the wake of Russian Military bombardment of a maternity hospital in Mariupol.

The highlighted disruptions pose a grave threat to a semiconductor industry that has hitherto been struck by a COVID-19 related supply chain shortages.

The chip shortage was so severe that it grossly affected iPhone maker, Apple, automaker, Ford F-150, Intel and even Samsung.

Though ResearchGate President, Shon-Roy had inferred renowned chipmakers may find their way round the quagmire when he said:

“The biggest chip fabricators like Samsung, Intel and TSMC, have tremendous buying power and access to products that may cover them for longer periods, two months or more”.

With the international community largely seeing Russia as the aggressor, with litany of sanctions imposed, the access to semiconductors has played and continued to play a vital role in the Russia-Ukraine war.

United States President, Joe Biden had days after the Vladimir Putin led assault on Ukraine issued new sanctions against Russia, one of them is halting the sale of U.S.-made semiconductors and other technologies to Russia, a move to limit the country’s access to important tech.

South Korea, Taiwan, Japan also followed suit.

Neon, an essential component of chip production will have it’s shortage derailing supply chains as the consequences of a global neon shortage was seen when the prices of Neon witnessed a 600 percent surge in 2014, at the last Russia-Ukraine conflict.

The Financial Times had meanwhile reported that the supply of xenon, neon, and krypton is getting closer with chipmakers and trading houses making fast moves for more orders as the gases will be in short supply as the war continues.

The global chip shortage, already paralysing tech production in many firms cannot afford another long spell and It’s expected that an amicable solution is reached as soon as possible.