back to article Ukraine invasion may hit chip supply chain – analysts

Analysts have warned that Russia's invasion of Ukraine may cause trouble down the line for chipmakers, which are still now caught up in a component supply crunch that's affecting product shipments. TrendForce this month warned that Ukraine supplies 70 per cent of the world's neon – a noble gas used primarily in the lithography …

  1. Anonymous Coward
    Anonymous Coward

    "...the laws of supply and demand come into play"

    A once real but now mythical concept. Today, when the supply is low/high, raise the prices, when the demand is low/high, raise the prices.... just raise the prices and don't look back.

    1. LybsterRoy Silver badge

      You missed the other "options"

      1. tweak the price up a little bit so, hopefully, people won't notice, or if they do won't complain because its "not much"

      2. dump a mega increase on customers on the basis "we've been absorbing the increased costs for ages now and we have no other option than to pass them on"

      Rinse and repeat at appropriate intervals.

  2. cyberdemon Silver badge

    This stinks a bit..

    It is starting to seem as if WWIII is really about China's dominance of tech.

    According to an earlier story apparently three companies in Ukraine - iceblick, Ingas and Cryoin, manufacture 70% of the world's neon gas supply (I guess it leaks out of rocks there? or do they condense it out of the air with cryopumps?) and 90% of the world's semiconductor-grade neon that is needed for making the DUV and XUV excimer lasers that are used to make semiconductors.

    Then last year there was a mysterious fire at ASML, and apparently a Chinese company ran off with the designs for their XUV lithography machines.

    What next? Will we see European and US Cryopump manufacturers hit with "mysterious fires" and the odd "stray" missile?

    1. Spoobistle

      Re: This stinks a bit..

      There may be a connection with the fact that Ukraine is also a producer of titanium. This requires inert gases for processing, for which argon is employed, but neon would be a valuable byproduct from the air distillation plants. This all uses lots of electricity, and we know where that came from in Ukraine...

    2. Dr Paul Taylor

      Neon production

      world's neon gas supply (I guess it leaks out of rocks there? or do they condense it out of the air with cryopumps?

      According to Wikipedia it's condensed out of the air. (Anyone have a better citation?)

      This could be done anywhere, with a good electricity supply. Iceland,maybe?

  3. Pete 2 Silver badge

    prices can only get higher

    > chip fabs stockpile the gases they require, so "gas production line interruptions in Ukraine will not halt semiconductor production lines in the short term."

    So not much of a stockpile, then?

    As far as I am aware neon, being an inert gas, doesn't have a shelf-life as such. Maybe whatever it is contained in might contaminate it past the extreme levels of purity required given enough time, but we are told nothing about that.

    Though whatever the background facts are, I still reckon that this conflict will be used as an excuse to raise prices.

  4. Eclectic Man Silver badge

    Palladium challenge contest

    The inside back cover of the 12th February edition of New Scientist magazine has a full page advertisement for the "Palladium challenge contest" which wants new and sustainable use cases that feature and increase the demand for palladium. The prizes are in US$ (up to 200,000) and the sponsor is Nornickel. An image shows a block of Palladium, 99,95, 2973.1g and "MADE IN RUSSIA".

    It seems that the prizes are due to be awarded in September 16 this year at the IPMI Annual Platinum Dinner in New York City. I wonder if a change in venue is on the cards?

    (The UEFA final has been withdrawn from St. Petersburg, Sebastien Vettel has said he won't go to the Russian Grand Prix, and there is even suggestions that the FIDE team chess championships should not take place in Russia* "War in Ukraine poses an immediate problem for Fide, the global chess body. The biennial 150-nation team Olympiad, which was postponed from 2020 due to Covid, is due to be staged in Moscow in July-August this year. The Fide president, Arkady Dvorkovich, used to be deputy prime minister of Russia under Dmitry Medvedev, and the Russian chess federation ias[sic] scheduled to send out formal invitations to participate as early as this weekend.")


    1. Brewster's Angle Grinder Silver badge

      Re: Palladium challenge contest

      F1 has now cancelled the Russia GP.

  5. Big_Boomer Silver badge

    Why do we keep on hearing of these 1 nation dependencies for resources? I assume that 70% of the Neon comes from the Ukraine because they supply it cheaper, but why does nobody seem to plan for the loss of these resources? Isn't that something that governments worldwide are supposed to be doing? We keep on hearing about resource issues (the last one was rare-earth metals from China and they still seem to have a strangle hold on that market) and yet nobody seems to do anything about them. Perhaps if our governments would do their ****ing jobs instead of posturing on Twatter or uttering their latest blatant lie, we might not have this type of problem. Yes, I am fully aware of market economics, but if your country/industry depends on a particular resource, you are a complete idiot if you rely on only once source.

    1. Timbo

      One could argue that sometimes deals are done with countries so that the income from the sales help to "grow" the local economy by way of jobs and $$.

      And yes, it is ideal to have a "backup" choice of supplier(s)...but sometimes, many factors can mean you stay with the #1 choice, through thick and thin.

    2. a_yank_lurker

      Some of the '1 nation depency' is manglement stupidity to not diversify the supply chain. However, some is due to where the ore is economically viable. I suspect neon is manglement stupidity while palladium is mostly due where the ores are found (Siberia I believe).

      1. cyberdemon Silver badge

        It's not just manglement of one company though - any company will always choose the cheapest supplier, because in capitalism, profit trumps everything. So when they all choose the same cheap supplier, there is barely anybody to say Oi, you lot are all using the same supplier, therefore collectively, you are a risky investnemt. (maybe a very dilligent investor might say that) and there is certainly nobody to say "Oi, diversify your suppliers, or else." That would be considered highly communist.

    3. LybsterRoy Silver badge

      In addition to the other posts consider what's happened to the energy market in the UK. Lots of little suppliers set up who all sourced their product from the same supplier. If a company/person bought from two of those little suppliers it would have made no difference when the shit hit the fan.

      Unless you do "proper" due diligence and trace the supply chain back to the prime source you could have several suppliers and still be buying from the same source.

      1. Binraider Silver badge

        The illusions of competition... Really the only differentiator between the small suppliers is what degree of insurance and hedging they had against price rises. Centrica can afford to borrow big loans to cover it's shortfalls.

        Jack and Jill gas supplying 5000 customers can't.

        The absolute failure of the free market to manage risk actually plays into the hands of rich gits with money, because those rich gits profit off the price spike. The free market conspires against tools that would hedge against price spikes. Centrica didn't renew the Rough storage facilities capability for insance.

        More than ever, we need a return to the CEGB and a modicum of central planning. Rather than this nonsense free-for-all that benefits a few wealthy London traders.

        Yes, yes, CEGB couldn't stop Vlad from his quest. But it would cut out the thieving middlemen. We might even have plans that look more than 5 years ahead on how to get

    4. Binraider Silver badge

      Ask Germany where Helium comes from. The Hindenburg didn't get to use Helium, because the US is more or less the only significant holder of it. And everyone else pays for that US monopoly too.

      Russia exports shedloads of Iron Ore; essential to Chinese steel production and the bottomless pit of cheap steel goods that flood the marketplace. Rare-earth metals aren't a China exclusive. They can be found everywhere on the planet - in small quantities. Energy is cheap in China, which means refining rare-earths is cost effective there. (They happen also be a dirty industry nobody wants in their backyard). Why is energy cheap in China? They will burn anything they can get. And they have no problems with planning permission whatsoever? I'm sorry sir, that whole city is being flooded to make way for the three gorges dam. And you will vacate immediately or join the flooding.

      A "Buy British" or similar campaign is all well and good, but I somewhat doubt that the Sheffield steel producers have used British iron ore for a very, very long time. (Most of them just blitz up scrap - not typically the premium product some would have you believe).

      Globalisation is a thing; and despite hatred of it from both the far political left and right (for different reasons); it is a natural function of trade agreements.

      Regarding good governance, well, there hasn't been that much to solve "at home" that doesn't go into the "too difficult" pile. So of course politicians will instead pander to fringe concerns to have the appearance of effectiveness while actually doing nothing on major issues.

      It's took a European war to get Germany to wake up and spend what it's supposed to on NATO for instance. NATO countries have been trying that for several decades. Big picture issues don't tend to get touched because "too difficult".

      Well, it's about bloody time we started addressing them, before war and the planet take their revenge on our own inaction.

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