Following pandemic-related supply disruptions, chipmakers are now contending with a new challenge: Russia, one of the world's largest suppliers of gases for semiconductor manufacturing, has begun to restrict exports.
A new type of 300 millimeter wafer with semiconductor chips and finished microchips of the semiconductor German manufacturer Bosch is pictured in Dresden, eastern Germany on May 31, 2021. - The factory will officially open next week on June 7, 2021.
Limiting Noble Gases
According to a report by Russian state news agency TASS, Moscow began banning exports of inert or "noble" gases such as helium, neon, and argon to countries that are deemed unfriendly by the country.
All three gases are essential to make the small electronic chips found in everything from cellphones to washing machines to automobiles, and they've been in limited supply for months.
CNN noted that these gases are essential to make the small electronic chips found in everything from cellphones to cars to various devices.
The export restriction is one of the latest moves of President Vladimir Putin against nations that have placed tons of sanctions on Russia amid its invasion of Ukraine.
According to consulting firm Bain & Company, Russia and Ukraine supplied around 30% of the neon gas to the chip sector before the war sparked.
CNN reported that the semiconductor industry and its customers were already recovering from the worst of the supply crisis. LMC Automotive built 10 million fewer vehicles last year owing to a semiconductor shortage, according to the company's report.
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The Role of Neon Before the War
Neon is used in the lithography process to manufacture semiconductors. The gas plays a role in the wavelength of light generated from the laser, which is then used to create patterns on the silicon wafers that comprise the chip.
Russia and Ukraine play an important role in the production of neon before war broke out between the two. Russia gathers neon from its steelworks and transports them to Ukraine for purification.
Senior Technology analyst at Techcet Jonas Sundqvist told CNN that both countries had been leaders in manufacturing noble gases since the Soviet Union's days when it was using the gases for military and space purposes.
Is the Tech Industry in Deep Trouble?
According to Peter Hanbury, a partner at Bain & Company's manufacturing practice for the Americas, the industry's reliance on Ukraine and Russia for neon was very high, ranging between 80 and 90 percent.
He added that chipmakers had decreased that reliance to less than a third since Russia's invasion of Crimea in 2014.
Hanbury said that it's too soon to tell how Russia's export limitations will affect the state of semiconductor manufacturers. He said that there could be an impact for a few months, but it would only be minimal.
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Written by Joaquin Victor Tacla
