Russia And Ukraine Go To War! Chip Supply Chain "Worse"

Russia and Ukraine go to war! Chip supply chain "worse"

The global "chip shortage tide" is a commonplace, and the war between Russia and Ukraine will "worse" the chip supply chain.

In the early morning of the 24th, Russian President Vladimir Putin delivered a televised speech and decided to launch a special military operation in the Donbas region. Ukraine declared that the whole territory had entered a state of war and closed its airspace.The official war between Russia and Ukraine has further affected the semiconductor supply chain, especially the upstream related materials industry.

Russia and Ukraine go to war, chip raw materials sound the alarm

Ukraine is a major supplier of raw material gas for semiconductors. Due to the escalating situation in Russia and Ukraine, the stability of the neon gas supply chain has inevitably caused panic in the entire industry.

According to a report released by TrendForce, a market research organization, the conflict between Ukraine and Russia may affect the supply of inert gas in Ukraine, and the reduction of gas supply will cause prices to rise, and the cost of chip production may rise as a result.

Ukraine's semiconductor raw material gas supply includes neon, argon, krypton, xenon, etc. Among them, neon gas is supplied by Ukraine for nearly 70% of the world's production. Although the proportion of neon gas used in the semiconductor process is not as good as that of other industries, neon, xenon, and krypton are semiconductor           manufacturers. As an indispensable process gas for the industry, the stability of the supply chain is extremely important, because this will seriously affect the continuity of production.In addition, there is another problem plaguing the industry - the continuous increase in the price of rare gases, and the possibility of price hikes caused by the escalation of the situation in Russia and Ukraine and the speculation of middlemen.

According to the Global Times, "China is a major steel country in the world. It has achieved breakthroughs in the purification technology of these rare gases, and the production process is relatively mature. It is no longer a technology that can 'stuck China's neck'." Senior analyst of China's special gas market Ren Lu said that in extreme cases, if the Russian-Ukrainian supply chain is interrupted, China can organize emergency production to ensure domestic supply.

 Japanese media reported that if Russia attacks Ukraine, the Japanese government will consider following up with the United States in exporting Russian chips and high-tech products using advanced technologies such as AI and robots.

The industry believes that Russia, as a countermeasure, will likely use the control of these semiconductor raw materials as a countermeasure.

The war in Ukraine has cast more shadows on the chip supply chain, and the escalation of conflicts between the United States, Japan and Russia will add more uncertainty to the chip market.

According to industry analysts, small and medium-sized enterprises in the supply chain will be the first to be injured in this round of crisis, while larger semiconductor companies like Micron have more sources of supply and can be more resilient in the face of the Ukraine-Russia crisis. It may not be affected in the short term, but not necessarily in the long run.

Under the background that the global core shortage has not yet eased, the Russian-Ukrainian crisis will inevitably further aggravate the core shortage problem. Ukraine is affected by the war, and the supply of key semiconductor gases may be interrupted, which wi ll have a serious impact on the semiconductor supply chain.

 In addition, after the United States, Japan and other countries have expressed their position on sanctions against Russia, the industry believes that Russia will also respond, and may use the control of these semiconductor raw materials as a countermeasure, so that the price of inert gas will soar and affect the supply of semiconductors. The affected chips will involve PMICs, MEMS, MOSFETs, IGBTs, and memory chips that have been in tight supply in the near futur.

Some industry analysts believe that the United States, Europe, Japan and other countries are greatly affected by the crisis in Russia and Ukraine, while China has the opportunity to benefit from the increase in market share in the short term due to the smooth acquisition of semiconductor gases and materials.