Russia-Ukraine War Creating Semiconductor Gas Shortage

by | Mar 23, 2022 | World News | 0 comments

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Russia-Ukraine War Creating Semiconductor Gas Shortage

Researchers around the world are warning that a war between Russia and Ukraine could cause a semiconductor gas shortage. Ukraine supplies nearly 70% of all neon, argon, xenon, krypton gas capacity in terms of raw material needed by companies producing chips worldwide.

The global chipmaking industry is closely watching the situation. They are waiting to see how it unfolds, and what implications it will have for the industry as a whole. It is a complex situation, with many moving parts, and the outcome is still very much uncertain.

Why Is It An Issue?

Noble gases are important to the electronics industry. Ukraine and Russia both produce noble gasses like neon, argon, or xenon that can be found in chipmaking processes for computers with their respective materials.

Inert gases are useful for semiconductor lithography processes because they provide the ideal medium to transfer microchip features onto paper or other materials. When circuit sizes get smaller than 220 nm, it begins entering DUV (deep ultraviolet) light territory where excimer lasers generate longer wavelength rays that can cut through resistive coatings more easily compared with UV/visible.

The DUV excimer laser uses neon gas which is difficult to replace. This process primarily takes place in the area of lithography, and includes 8-inch wafers 180 nm -1X nanometers up through 12Inch systems with features as small 1-micron square areas or smaller!

Chipmakers require a variety of gases in their manufacturing process. These gases are used to create the tiny circuits that power your smartphone, graphics cards, and many other devices.


Will it affect me?

Will the semiconductor gas shortage affect me? This is a complex question with a simple answer. Yes, absolutely it will. With the chip shortage beginning to improve we are looking at another shortage of a key material that is used for chip making. “The Ukraine war tilted the supply and demand quickly out of balance lately, leading to big price increases,” said Liu Yin, a sales manager at Shanghai-based special gas supplier Song Ci Technology. Liu added that neon could become even more expensive, given that production in Ukraine is unlikely to resume to previous levels any time soon. While some larger chip manufacturing companies have up to a 6 months supply we are still looking at a loss of a significant supplier. This will decrease supply and drive up costs for everyone looking for these chips. The price of neon has already skyrocketed, in China for example where the price shot up nine times its original price on Feb 24, 2022!


Advice from  the  Author

With the semiconductor supply increasing we are seeing a slight dip in cost for GPUs and other devices that use semiconductors. If you are on the fence about upgrading your hardware we recommend making the move now. With the impending shortage of critical semiconductor gases, we could see a price increase more than on Nov 21 when the price of graphics cards doubled from MSRP prices! Contact us today about any upcoming hardware purchases!

Semiconductor Gas Shortage

Who is Affected?

Unfortunately, many of the world’s leading chipmakers will be impacted by the impending shortage.  With Ukraine producing close to 40% of the world’s neon this is a significant long-term loss. The world’s leading chipmakers are all but certain to be using gas supplies from this small handful of suppliers such as Linde and Air Liquide. These companies purify and liquefy natural gases before supplying them on behalf of customers. Some of their customers include Intel, TSMC & Samsung who need pure ingredients for their manufacturing processes in order to create complex technological products like smartphones or computers.

“The scale of the impact will depend on how long this war lasts,” said an executive at a chip production equipment maker that supplies a wide range of global chipmakers.

“Big chipmakers like TSMC usually have higher levels of inventory to support production continuity, but for mid- to small-size chipmakers with fewer resources, they would start to feel the tightness of supply over the course of time.”

According to Su Tzu-yun, director of the Institute for National Defense Security Research countries like America and Japan have been looking into finding alternative sources for rare earth metals because they are worried about geopolitical risks. In 2010 China cut off supplies after being accused by nations such as Japan who said their reliance on this mineral could lead them into a situation where it might not be available at all times.


In Conclusion


While the situation in Ukraine is still occurring, and it’s unclear how long the current gas shortage will last, industry analysts, are already predicting that this could lead to a worldwide shortage of chipmaking gases. This would have a devastating impact on the semiconductor industry, which is already struggling with supplying the world. So what can be done to mitigate the potential damage? Industry players need to start working together now to find alternative sources of supply and create contingency plans for dealing with future disruptions. The longer they wait, the harder it will be to make up for lost time!

Maverick Gardner is a growing leader MSP (Managed Service Provider) in IT Consulting, Infrastructure. IT Services, Support and Maintenance Services, Cloud, Deployment and Procurement, Disaster Recovery, IT Outsourcing Services, and more!

IT That thinks outside the box…



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