Ukraine’s two main neon suppliers, which generate over half of the world’s supply of the critical component for chip manufacturing, have ceased operations as Moscow escalates its offensive on the nation, threatening to boost costs and exacerbate the semiconductor shortage.
According to Reuters calculations based on numbers from the firms and market research company Techcet, two Ukrainian companies, Ingas and Cryoin, supply 45-54 percent of the world’s semiconductor grade neon, which is vital for the lasers needed to create chips.
According to Techcet, global neon use for chip fabrication hit over 540 metric tonnes last year.
According to corporate executives reached by Reuters, both firms have shut down their operations as Russian soldiers have expanded their attacks on cities across Ukraine, killing civilians and damaging critical infrastructure.
The halt puts a pall over global chip output, which was already in short supply after the coronavirus outbreak pushed higher demand for mobile phones, laptops, and new cars, causing some manufacturers to reduce output.
Bondarenko claims that prices, which were already under pressure because to the epidemic, had risen by up to 500 percent since December. According to a Chinese media source citing Chinese commodities market information provider biiinfo.com, the price of neon gas in China has quadrupled from 400 yuan/cubic metre (A$87) in October last year to more than 1600 yuan/cubic metre (A$167) in late February.
According to the US International Trade Commission, neon prices increased by 600 percent in the run-up to Russia’s 2014 takeover of the Crimean peninsula from Ukraine.
Organizations in other parts of the world may start producing neon, but it would take nine months to two years to build up, according to Richard Barnett, chief marketing officer of Supplyframe, a company that offers market analytics to companies in the global electronics sector.
