CHIP DEFICIENCY DOES NOT PASS

Photo Credits : Depositphotos

Two Ukrainian companies that produce about half of the global amount of neon for semiconductors have stopped working.

Although Ingas and Cryoin do not work for only ten days, as they produce between 45% and 54% of the special neon needed to produce chips, this will have serious consequences for global supply.

Under normal conditions, Ingas delivers 15 to 20 thousand cubic meters of neon per month, of which about 75% goes to the chip industry. Global neon production is about 540 cubic tons per year, according to research by Techet. 

Unlike Cryoin, which halted production on the first day of the invasion, Ingas continued production until this week, when conflicts reached Mariupol, where their factory is located.

A new threat

This supply problem is a serious threat to the global chip industry, which has only just begun to recover from the problems caused by the pandemic. 

Delays in production and the supply chain over the last two years have created major problems in the market and production delays, from cars, through graphics cards to smartphones.

Such interruptions in the supply chain can have a big impact on the production of chips, especially with smaller manufacturers. 

Large manufacturers such as Intel, TSMC, and Samsung have more money and bigger warehouses, which means that they can withstand the lack of some components much longer than others, at least a month or two. 

See how semiconductors are made:

The price of key components is rising

The United States and other countries have responded to the shortage of chips by investing in production, but it will take all the new factories at least a few years before they start working. 

On the other hand, even if all new factories can start production today, the lack of key elements, such as neon, affects the delay and prevents production.

Since the last conflict, in 2014, the price of neon has jumped by 600%, and it will not be long before we see a global shortage of this gas, with delays slowly but surely accumulating.

Sanctions have been imposed on Russia by large companies, so VISA and MasterCard, as well as ApplePay, PayPal, and Google Pay services, have not been functioning in this country for some time, and this country is accelerating the development of its Internet network called RUNET, which could be an alternative.

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