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Russian invasion of Ukraine to further strain chip supply!

Russia’s invasion of Ukraine will further strain supplies of semiconductor chips, amid a shortage that has already caused global production disruptions for tech companies and automakers for more than a year.

Russia and Ukraine are critical suppliers of neon gas and palladium that are used to produce semiconductor chips, according to Techcet.

Namely Russia and Ukraine are critical sources of neon gas and palladium that are used to produce semiconductor chips, CNBC finds

*IDC Chart on global revenue demand

Russia produces neon, a gas that’s a byproduct of steel manufacturing, which is then sourced and purified by a specialized Ukrainian company

  • The price of neon shot up 600% the last time Russia invaded Ukraine in 2014.

“This will have an impact,” Techcet’s  CEO Lita Shon-Roy told CNBC “It will continue to constrain the chip source going into the automotive industry.”

A global shortage of semiconductor chips caused sporadic shutdowns of manufacturing facilities, specifically automotive plants, over the past year or so.

Russia also is a key palladium supplier, along with South Africa, that supplies approximately 33% of the global demand, Techcet estimates

For the automotive industry, palladium also is a key metal used for catalytic converters. Palladium prices jumped by more than 7% on Thursday as part of a larger surge in precious metals.

“It’s just one more thing that is going to force prices up,” Shon-Roy said, adding the increase likely won’t be felt for six months, if not a year, because most chip manufacturers have long-term agreements for such raw materials. “The automotive market is going to feel that to be sure.” Protocol reported. 





source: Protocol/Techcet/CNBC