Russia’s invasion of Ukraine is affecting the chip industry. Worldwide, chip manufacturers confirm that the supply chain has been disrupted.
Russian troops have entered Ukraine. Explosions are heard in several Ukrainian cities. Putin threatened resistance with “consequences that you have never faced in your history“. The US and European Union are preparing to impose sanctions on Russia. China calling on world leaders to exercise caution.
The global chip industry is under pressure. Ukraine supplies 90 percent of all neon used by US chip manufacturers. Neon is indispensable for lithography systems used to produce chips. Russia accounts for 35 percent all of the palladium used by the US. This material is necessary for sensors and memory chips.
“The availability of those materials is already tight”, an anonymous chip industry insider told Reuters. “Any further pressure on supplies could push up prices (of chips).”
Response from ASML, Intel and TSMC
Yesterday, ASML, Samsung Electronics and Intel announced that alternative neon suppliers are being considered. Micron Technology, a US memory chip manufacturer, says it’s presently working with alternative suppliers.
Since 2014, some manufacturers have been buying their neon outside Ukraine. In that year, Russia annexed Crimea, a Ukrainian region. The tension spurred chip manufacturers to find alternative suppliers. A South Korean manufacturer, SK Hynix announced that it “secured” plenty of materials.
Taiwan’s minister economy claims that Russia’s invasion has no impact on the Taiwanese supply chain. TSMC declined to comment on the situation.